THREE new surveys reveal strong economic growth and job creation in Yorkshire, but with a warning of rising skill shortages.

Business advisers BDO said hiring intentions are at ‘sky-high’ levels and stronger than the mid 2000s boom.

But a KPMG survey of Northern recruitment consultants shows that, while recruitment of permanent and temporary staff continues to grow, the number of suitable candidates continues to fall.

Meanwhile, Lloyds Bank Commercial’s latest business activity index shows that private firms in the region continue to outperform the UK average. BDO flags up a ‘puzzling’ lack of productivity growth, in spite of continuing strong economic expansion, raising a ‘big area’ of concern for the region’s economy. Workers’ output per hour has been static through two years of the recovery, a period of flat productivity unprecedented since the Second World War II.

In spite of this BDO’s indices predicting economic growth three and six months ahead, rose to 103.9 and 104.9 respectively, the highest since last summer.

Terry Jones, BDO Yorkshire head, said: “While it is encouraging to see strong business confidence, the continuing poor labour productivity performance is a very significant concern. Although employment growth in recent years has been strong, much of this has been in part-time jobs. Productivity ultimately determines our prosperity so it is a crucial area that must be addressed. Policymakers of all persuasion must take on this productivity puzzle.”

The Jobs North report says regional permanent staff placements increased for the 23rd consecutive month to a six-month high and outpacing the UK average. Temporary placements also rose for the 32nd month running.

But the drop in candidates for permanent jobs continued for the 26th month and at the fastest rate since December.

Chris Hearld, KPMG’s Northern chairman, said: “Recruiters are struggling with industry-wide skills shortages, as demand for talent continues to outstrip the number of candidates. This pervasive skills shortage could put the brakes on economic growth if it continues unabated. This tightening labour market is forcing up wage inflation as businesses bid for the best talent.”

The Lloyds Bank findings show that private sector activity in the Yorkshire region increased at the fastest pace since August 2014 last month,l supported by a further rise in new orders and employment growth.

Leigh Taylor, Lloyds Bank Commercial Banking, area director for SME Banking, said: “A rise in activity was supported by a marked increase in new orders, with firms linking greater sales growth to the launching of new projects and improved marketing strategies. This led to employment levels rising sharply and at the fastest rate recorded. ”