More than three quarters of businesses in the South West are experiencing recruitment “difficulties”, new data has suggested.
A growing number of firms in the region have said they are facing issues with finding suitable staff, with some indicating the cost of rising wages, in order to attract and retain talent, was being passed on to customers.
A total of 319 companies took part in a survey by Bristol-based chamber of commerce Business West, with more than 80 per cent saying they had struggled to fill vacancies.
Business West said this reflected a two per cent rise on the previous quarter and comes as recent ONS figures showed that there are more than 1.2 million positions to fill across the UK.
Despite this, the figures showed a dramatic upward shift in business confidence, in both the UK economy and in firms' prospects for their own fortunes. Confidence in the national economy rose to 20 per cent, up from an all-time low of six per cent in Q4 2022, while more than half of respondents rated their current resilience as ‘good’ or ‘excellent’ - up from 46 per cent previously.
While the Bank of England has forecast 40-year-high inflation will drop over the next year, more than half of those who took part in the study said they intended to increase their prices in the next three months. Two thirds of South West businesses said they were under pressure to increase prices because of rising salaries and other labour costs which were found to be the leading source of inflation.
Peter Allen, general manager of Swindon-based manufacturer Catalent Pharma Solutions, said: "We cannot absorb inflation so price rises will need to be passed onto our customers. Labour cost increases to keep pace with market rates and cost of living increases will also have to be passed through.
"While we’re looking to expand manufacturing and new product development capacity through inward investment, high calibre individuals to help deliver new projects are difficult to recruit. There is definitely a shortage of labour post-Brexit as we were very reliant historically on having foreign nationals joining us."
Deborah Flint, managing director of Gloucestershire food producer Cinderhill Farm, added: "To cover an increase in salaries to meet the new Living Wage Foundation salary level and associated knock-on increases to all other staff, we are likely to have to increase our prices."
Business West’s director of policy Matt Griffith said: "Despite the continuing challenges facing businesses, it is encouraging to see a rise in positive sentiment among firms..
"While the top concerns for businesses during the quarter were general economic conditions, inflation and general business uncertainty, these are all down since last quarter.
"However, it is still a tough environment for businesses, with cuts to the energy support scheme leaving many firms uncertain about what the next 12 months will bring and the tight labour market continuing to hinder firms' growth."
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