ONE in six companies in Northern Ireland say they won't be able to afford the new national living wage when it comes into force next year.
From April 2016, firms must pay all employees aged 25 or over a minimum of £7.20 per hour - rising to £9 per hour from 2020.
However, 15 per cent of businesses say they won't be able to afford the new wages, according to a survey by the Northern Ireland Chamber of Commerce.
For its latest economic quarterly survey which covered the three months to September, it asked firms about the new living wage and found 28 per cent were opposed to its introduction.
The imposition of the wage has been opposed by several sectors including retail and hospitality.
Most members (78 per cent) said they already pay all staff a higher rate than the new minimum.
The survey - the least positive from the chamber for a year - found many employers felt under pressure to increase wages generally to attract new staff.
Almost 60 per cent of businesses who were surveyed said they expected wages to rise over the next year.
Around a third said any wage increase would be under 2 per cent.
The report pointed a loss of momentum in the north's economic recovery with deteriorating performance in the manufacturing and services sectors.
Manufacturers’ domestic orders balance fell by 22 points to +10 per cent (UK +18%) with more businesses finding sales in the domestic markets challenging.
However, the export performance of companies in the sector was more positive this quarter with export sales balance up 19 per cent and orders balance up 17 per cent.
The balance for domestic sales in the services sector was the lowest in the UK at +4 per cent while Export sales (-10 per cent) and orders (-15 per cent) balances also became negative.
The chamber's chief executive Ann McGregor said the quarter had "not been particularly strong for Northern Ireland".
On the national living wage, Ms McGregor said: "Members have concerns about the introduction of the National Living Wage.
"They have been given little time to prepare for its introduction in April 2016 and assess the impact on recruitment intentions particularly around, for example, older apprentices aged 25 plus.
"There are also concerns around the implications on the cost of doing business and the knock on effects on international competitiveness. The view is that the policy has not been well enough thought through and potential impacts not adequately assessed.”
BDO managing partner Peter Burnside said the results of the survey were "disappointing".
"Our precarious recovery is typified by lower confidence on issues of turnover and profitability among NI businesses than throughout the UK," he said.
“However there are some positives and more Northern Ireland businesses are reporting increases in local sales and employment than are reporting a fall while manufacturing export performance has improved although it is too early to see any trend emerge."
