Business confidence has continued in the doldrums at the start of 2009 with one in three firms now expecting to shed staff.
The National Bank's first monthly survey of the year shows pessimists outnumber optimists, with a net 41% of businesses expecting the economy to worsen over the coming year, a drop of six percentage points.
Firms' expectations of their own activity improved slightly, but only from its worst-ever reading to its second-worst reading of a net 20%.
With employment and investment intentions at all-time lows, National Bank chief economist Cameron Bagrie says it suggests the downturn is heading into a new phase.
He says the first stage was about demand, the second is about the business sector's response to the difficult economic climate which is to cut back on staff and investment.
Mr Bagrie describes the figure of one in three firms likely to shed staff as a "staggering statistic".