SKILLS shortages in York and North Yorkshire are likely to continue for some time, warns Len Cruddas, chief executive of the 754-member York and North Yorkshire Chamber of Commerce.

It is a symptom of virtual full employment in most areas of the region - some east coast towns like Scarborough excluded - and while inroads into the problem are being made by training establishments such as York College of Further and Higher Education and the York Rail Academy, the full solution would be "a long-term haul," said Mr Cruddas.

His warning comes after a survey in the latest Business in Britain Report from Lloyds TSB Corporate shows that almost half the Yorkshire businesses surveyed found difficulties in recruiting skilled staff.

The record low in unemployment may be good news for the national economy, but it is manifesting itself in huge recruitment problems for businesses, endangering competitiveness, says the report. But where Mr Cruddas differs with the conclusions of the Business in Britain Report is the suggestion that the steam is going out of recruitment drives.

"We have not seen evidence of that in York and North Yorkshire. Broadly speaking, while employment is high there is still an issue, particularly in rural areas, of low wage employment."

The Business in Britain Report suggests that Yorkshire employers in general appear to have slowed down their recruitment drives over the last half year, with the number of employers not recruiting rising from 26 per cent six months ago to 37 per cent.

Almost half (46 per cent) of the businesses surveyed that have tried to recruit skilled staff this year experienced problems in doing so. This compares with only 22 per cent struggling to recruit unskilled staff. Chris Taylor, relationship director at Lloyds TSB Corporate, said: "This illustrates perfectly the Catch-22 situation facing businesses at a time when unemployment is low. The dwindling pool of talent makes it more and more difficult to recruit appropriately-trained and qualified staff. Many firms are now choosing not to recruit at all, but when they do need to increase staff numbers the right people for the job are simply not available and they have to work even harder to find them.

"This could result in competitiveness being threatened as wage bills are forced up and businesses have to introduce even more innovative ways of retaining and motivating key staff."

Updated: 09:48 Tuesday, November 18, 2003