Adds CEO comments paragraphs 2-6, share price paragraph 11

By John Revill

ZURICH, May 8 (Reuters) - Adecco ADEN.S beat analysts' forecasts despite lower first quarter revenue, lifting its shares as the staffing company said there had been a modest improvement in hiring.

The Swiss company, which provides temporary and permanent workers to employers, said it had narrowed a 5% drop in revenues at the end of last year to a 2% downturn during its latest quarter.

The improvement was equivalent to a 1 percentage point gain in each month for January to March, a trend that continued into April, it said.

The company's shares were 6.3higher in early trading, having lost 7.3% since the start of the year.

Chief Executive Denis Machuel said Adecco's clients who hire its office and factory staff remain cautious on recruitment decisions due to U.S. President Donald Trump's tariffs policy.

"We see some clients being in a more of a wait and see mode because of the uncertainty, and you know uncertainty is the word that everybody uses at the moment," he told Reuters.

"I haven't come across a client that says 'I know exactly what is going to happen, I'm in a good place'."

The biggest impact was on hiring permanent staff, Machuel said, and in the United States and Europe. All industry sectors were affected, he said.

In the current environment Adecco would concentrate on capturing market share from rivals, he said.

For the three months to the end of March, Adecco reported operating income of 111 million euros ($125.71 million), ahead of analyst forecasts of 97 million euros.

Adecco's revenue of 5.57 billion euros beat forecasts for 5.51 billion euros in a company-gathered consensus of forecasts.

Other recruiters have also recently flagged concerns about a worsening job market due to an escalating global trade war and Europe's economic struggles.

Adecco's Dutch peer Randstad RAND.AS last month said its clients were currently holding back on investment decisions, including whether to hire, while ManpowerGroup MAN.N said companies were taking a wait-and-see approach on whether to add new staff.

($1 = 0.8830 euros)

(Reporting by John RevillEditing by Ludwig Burger and Elaine Hardcastle)

((John.Revill@thomsonreuters.com; +41 41 528 36 37; Reuters Messaging: john.revill.thomsonreuters.com@reuters.net))