Businesses brace for profit squeeze in 2011

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Gina Dyer
Deputy Editor
Sift Media
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Businesses are cautious about their profit outlook for the next 12 months, with the majority expecting an increase in costs but very few expecting to recoup these through higher prices.

The squeeze on UK firms is expected to be markedly worse than elsewhere, according to KPMG’s new Global Business Outlook study.

The study found that 88% of service firms around the world expect input costs to increase, or at best remain static, over the coming year. In contrast, just one fifth (20%) of services firms and less than a third of manufacturers (32%) expect to be able to command higher prices for goods and services this time next year.

Increases in raw materials prices, competitive pressures, mounting energy costs and rising inflation were all cited in the study as contributing factor...

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