Newspaper advertising spend rallied moderately in the third quarter, prompting predictions that the sector may be heading for recovery after more than a year of sustained decline.

Some €58.3 million was spent in the Republic's 12 national newspapers in the three months to the end of September, data compiled by the National Newspapers Of Ireland reveals.

Although the figure represents an 8 per cent fall-off over the same period last year, the rate of decrease was half that of the previous quarter.

This was sufficient to provoke claims that the advertising sector is on course to perform strongly in the traditionally buoyant pre-Christmas period.

National Newspapers of Ireland chairman Mr Gavin O'Reilly said advertising had remained robust in a cooling economy.

An upturn in the classified advertisements market was especially heartening.

"Having seen classified categories somewhat depressed in the first half, it is gratifying to see recovery in key advertising areas, but particularly in property, recruitment and general run-of-paper advertising.

"Crucially, brand and retail advertising has returned to normal and expected levels for the seasonal time of the year," he said.

Anecdotal evidence suggested that the cautious atmosphere prevalent among clients at the beginning of the year had started to dissipate, encouraging heavier advertising outlay, the Institute of Advertising Practitioners in Ireland said.

But although optimism was seeping back into the sector, there was no evidence that advertisers were moving to increase their annual budgets, the institute's information manager, Mr John Holohan, said. Property advertising had shown strong growth, compensating for a slump in recruitment spend, especially in the technology sector, he said.

Newspaper advertising revenue totalled €190 million from January to September, an 11 per cent fall over last year. Agency spend accounted for €105 million, with direct advertising making up €85 million.

The advertising sector was well placed to recapture lost ground in the fourth quarter, Mr O'Reilly said.

"These figures demonstrate that despite overly negative market commentary and bearish forecasts, advertising has not been as adversely affected as other industries - indeed, for the quarter, advertising expenditure has shown a much improved outturn, after a difficult first half," he added.