EIGHT out of ten businesses in the north are now reporting recruitment challenges, which is negatively impacting on productivity and economic growth, according to a new report.
The latest Northern Ireland Chamber of Commerce and BDO Quarterly Economic Survey has highlighted the ongoing skills deficit as a major cause for concern, with around 80 per cent of businesses now finding it difficult to attract the right staff.
The issue is particularly pronounced in manufacturing, with the proportion reporting recruitment issues now the highest on record. It comes despite the fact recruitment intentions remain above the UK average, with 71 per cent of manufacturers (UK 67 per cent) and 58 per cent of services (UK 47 per cent) actively trying to take on staff.
The survey, which covers the period July through to September shows fragile growth in the Northern Ireland economy, with some positive signs noted within manufacturing.
All key balances within the sector were positive in the last quarter for the first time in a year, export balances were strong, while the industry's cashflow has turned positive again.
Confidence also remains strong in relation to turnover, but crucially performance does not correspond, with sales and order balances the weakest in the UK alongside north east England.
Services reported subdued growth in the last quarter, with sales, and orders weak in comparison to other UK regions. Confidence also remains poor in relation to profitability, with the balance now at its lowest level since 2011.
Brexit remains an issue of concern among respondents, with almost one in four assigning a person to deal with it and just under a third (30 per cent) now seeking professional advice on the matter.
This is more prevalent among the north's medium and large firms, who make up 40 per cent of the total. Almost half of members (47 per cent) have yet to seek any advice in relation to Brexit, largely due to the political uncertainty over a final deal.
Alongside Brexit certainty, the return of the Northern Ireland Assembly was also highlighted as a way to help drive the local economy, while businesses also felt that support from the government in upskilling workers, reducing business costs and driving growth would be beneficial to increasing productivity.
NI Chamber chief executive, Ann McGregor said the latest findings highlight the negative impact of Brexit and the lack of a Northern Ireland Executive on the economy.
"We have a vibrant and innovative business community that wants to invest and grow, but we are stuck in limbo while Brexit negotiations continue to dominate," she said.
“Those businesses that are hiring are finding it increasingly challenging to fill vacancies. 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.
“This is also set to get worse post-March 2019. Government must work with business to develop an immigration policy that supports a growing economy."
Brian Murphy, managing partner at BDO said businesses need support to ensure continued investment and growth.
“Our businesses are ambitious and want to invest. To do so, they need clarity around a range of matters including Brexit and how to address key regional issues in Northern Ireland. Clarity on these points will allow them to develop and implement meaningful long term growth plans," he added.
