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A new survey in Australia says one in 10 businesses there will be forced to lay off staff in the new year because of increased costs and lower profits.
Dunn and Bradstreet spoke to 1,200 companies across the Tasman about their expectations for the first quarter of 2007.
The group's managing director, Christine Christian, says a third of respondents believe their profits will be down compared to March 2006.
She says more than half of the businesses expect to raise their prices early next year.
"It's the margin erosion and the desire not to decrease employee numbers that has led to this very, very strong expectation that we will see a rise in selling prices in the March quarter 07," she said.
Ms Christian says inflationary pressures are expected.
"So overall we expect selling prices to increase, we can see inflationary pressures set to remain and for most businesses there is going to be an impact in the area of sales and profits," she said.
- RADIO AUSTRALIA
