Special Report: The US - America bounces back.

The global advertising industry can breathe again - the world's biggest ad market, the US, is returning to growth.

It should come as a relief to us all that the world's largest advertising market is going great guns this year, buoyed by the Olympics and the presidential elections. But similar increases in 2005 and their knock-on effects in Europe and beyond are harder to predict because of a number of headaches that do not seem to be going away: the economy, political uncertainty and the war in Iraq to name the big three.

All the top economic ad forecasters in the US (Robert Coen at Universal McCann, TNS Media Intelligence/CMR, ZenithOptimedia and Veronis Suhler Stevenson) agree: in 2004, adspend will grow by 7 per cent to 10 per cent to dollars 263.3 billion. And while forecasters predict adspend in 2005 will grow by around 6.5 per cent to dollars 280 billion, not everyone on Madison Avenue is laughing into their lattes just yet. 'In 2004, I was cautiously optimistic, but I'm more guarded going into 2005,' Bob Jeffrey, the worldwide chief executive at J. Walter Thompson, says.

'2004 will be a good year for us - and probably for a lot of others in the industry, because we had a tremendous amount of new business,' he explains.

'But I don't get the same sense of cautious optimism going into 2005. There's a high level of anxiety among clients and I think it's fuelled by a number of things. With the tight presidential race, there are a lot of economic issues. What's going to happen in Iraq? Is it going to become a bottomless pit in terms of military spending? What will the economic philosophy be regarding tax cuts and interest rates? There's a huge amount of uncertainty. I have a somewhat bearish view because I'm seeing clients cutting back. They're holding budgets really tight.'

Persistent political uncertainty and economic woes all could have …