Eight in ten businesses in Northern Ireland trying to recruit new staff in the third quarter are facing significant challenges in doing so according to the latest Quarterly Economic Survey published by the Northern Ireland Chamber of Commerce and business advisers BDO.

The survey found that recruitment intentions are relatively strong with 71% of manufacturers and 58% of services trying to recruit. However difficulties recruiting staff is a major issue for both sectors, largely professional/managerial in services and skilled trades in manufacturing.

The share of manufacturers having difficulties recruiting skilled workers was also found to be the highest on record since 2011. This is leading to growing pressure on manufacturers around pay settlements.

Furthermore half of firms report that difficulties around recruitment was having the greatest negative impact on business productivity, an issue of concern given that low productivity has been a persistent drag on the Northern Ireland economy.

A lack of skills among their current workforce (25%) and a lack of management skills (21%) also have a considerable negative impact on productivity.

Overall, the survey shows that there are still signs of growth in the Northern Ireland economy in Q3 2018 although growth remains fragile, with manufacturing performing better than services across most key indicators.

“Those businesses that are hiring are finding it increasingly challenging to fill vacancies,” Ann McGregor, Chief Executive of NI Chamber, said. “There are some serious skills gaps opening up for firms and we urgently need to find a way to resolve this. Many firms are deeply invested in developing home-grown skills and talent within their company, however this alone is not enough to fill the skills gaps, at all levels that businesses face right now.”