UK firms want to recruit more workers but cannot find or afford the right staff, a survey has found.
The British Chambers of Commerce (BCC) spoke to 7,300 businesses in the manufacturing and services sectors, and found the percentage seeking to hire had grown by up to 9% in the last quarter.
But most also experienced “high levels of recruitment difficulties” which the BCC said was a risk to growth.
The government said it was working to deliver a highly-skilled workforce.
According to the trade group’s quarterly economic survey, both manufacturing and services firms reported “solid growth” in their businesses in first three months of the year, with domestic and export sales up since the previous quarter.
It also found “confidence in turnover and profitability is improving”, and that some 86% of manufacturing firms, up from 77% in the last quarter, and 59% of services companies, up from 53%, wanted to find new recruits.
‘The right skills’
But despite this, around 74% of manufacturing firms and 58% of services firms said they were struggling to find staff.
Suren Thiru, head of economics at the BCC, told the BBC: “The main issue is finding enough people with the right skills, and of course the workforce is aging.
“A lot firms are also finding their costs rising and this is deterring business investment, including investing in training their staff.”
He said new upfront taxes were partly to blame, such as the recently introduced immigration skills charge and new National Living Wage.
But he also said that the rising cost of imported raw materials, resulting from the weakness of the pound since the Brexit vote, had squeezed business spending.
“Another emerging issue is whether firms can continue to get workers from overseas both in the run-up to, and after, Brexit,” he added. “Industries like hospitality and construction are heavily dependent on EU workers.”
A government spokesman told the BBC: “The UK economy has shown sustained momentum since the EU referendum and it’s encouraging to see continued investment and growth in important sectors like manufacturing and services.
“We know that businesses need a highly-skilled workforce to attract the right people for the right jobs and we are helping to deliver this through initiatives like our modern Industrial Strategy, our £500m annual investment in technical education and the introduction of the Apprenticeship Levy.”
A separate survey by the Federation of Small Businesses has found confidence among small firms has risen to the highest level in over a year, despite spiralling business costs.
According to the index, confidence stood at 20.0 in the first three months of 2017 – the highest figure since the fourth quarter of 2015.
The FSB said the recovery had been spurred by increased international trade, with 15.6% of small firms reporting a rise in export activity during the past quarter.