Business leaders in Coventry and Warwickshire say the low unemployment rate has been one of the success stories of the past year.
But the Coventry and Warwickshire Chamber of Commerce believes difficulties in recruiting staff is a major factor in holding back a stronger economic recovery in the region.
The latest figures from the Office for National Statistics showed that the number of job vacancies across the UK has hit a record high and Sean Rose, head of policy at the Chamber, said this is being reflected in the city and the county.
He said: “One of the biggest economic fears since we were hit by Covid-19 was that it was going to lead to very high unemployment.
“It’s a testament to firms across Coventry and Warwickshire that this hasn’t materialised and, also, the very speedy support offered to companies at the beginning of the pandemic.
“However, our members across the city and the county are now faced with a massive challenge in recruitment and it’s a key factor in holding back the recovery.
“Almost every business we speak to that wants to take on new people to help them rebuild and grow is struggling to do so. There are high-profile sectors such as HGV drivers and hospitality – but it really is across the board.
“This, along with rising costs, increased tax and supply chain difficulties, is making it difficult for many businesses to drive growth which would, in turn, help the whole economy to recover.
“The Government must look at the recruitment crisis as a matter of urgency and expand the list of occupations where businesses can more easily access skills they need from overseas to help them grow.”
British Chambers of Commerce Director of Policy James Martin said: “With the number of employees working in the UK economy at the end of September climbing back to pre-pandemic levels, the overall UK labour market is showing some recovery. Businesses who have shown innovation and creativity to survive and rebuild from the pandemic should take much of the credit.
“But there remain very real difficulties under the overall numbers, with labour and skill gaps, rising cost pressures and an increasingly onerous tax burden showing that the Government needs to act now to improve business conditions.
“Today’s figures show a second month with a record number of vacancies, now at more than a third above their pre-pandemic levels. With Brexit and the pandemic driving a more deep-seated decline in labour supply, businesses throughout the UK tell us they cannot access the skills they need even as their costs balloon.
“These recruitment difficulties are likely to dampen the recovery by limiting firms’ abilities to fulfil orders and meet customer demand. Business investment will then suffer, curbing any chance of a prolonged recovery.
“Expanding the Shortage Occupation List will help businesses access the skills they need when they can’t recruit locally in the shorter term, supporting them to create a truly high-wage and high-productivity economy in the longer-term.
“Furlough ended in September, and the impact of that decision may not be fully picked up in the latest data. Skills mismatches are very likely to limit how many of those seeking jobs after furlough can move into available roles.”