Small to medium sized businesses are facing a profit crisis, with just under half not meeting their targeted budgets.
A mood of the market survey by KPMG shows 48% of companies surveyed are missing their profit forecasts.
However, the survey also found high confidence levels, with 85% of respondents expecting better times ahead for their businesses.
KPMG's business advisory division says companies that have met their profit forecasts have carefully reviewed and modified their businesses.
National managing partner Mark Kippenberger says small to medium sized businesses will have to work harder over coming months to meet their profit targets because there will continue to be pressure on pricing.
He says many businesses have had to absorb international price increases, but have not been able to pass them on.