Armageddon is not yet with us, the latest trading statement from advertising giant WPP said, rather tongue-in-cheek.

The company revealed in late October a drop in quarterly revenues to the end of September 2009, but also said things were “less worse” than in the previous three months.

The group has suggested that the massive worldwide government stimulus packages of early 2009 had produced a positive effect on the outlook for the future.

But it warned that improved confidence was still not translating into increased advertising spending, and reported its own revenue was down by 8.7 per cent over the same period in 2008, while staff numbers worldwide had been cut by 10 per cent over the year.

“There is little doubt that consumer and corporate confidence has recovered somewhat from the panic levels of the fourth quarter of 2008 and first quarter of 2009,” the group said in a statement.

But in the face of evidence that investment in brands was largely at a standstill, the company’s statement attempted to talk up prospects: “Companies that invest in brands during recessions, emerge with higher sales trajectories, profits and profit margins in better times,” it said.

The crunch will come, it believes, when governments’ financial stimulus packages begin to run dry as central banks act to head off the threats of higher interest rates and inflation.

And this is the ‘elephant in the room’, the reaction to which WPP believes will determine whether advertising growth can be sustained: “Whilst the hearts of (executives) are stronger and their minds clearer, increased confidence is still not transferring to their cheque-writing hands,” WPP said.