The BDO Employment Index, which forecasts businesses’ hiring intentions in three months time, rose to 109.6 in July from 108.8 in June, suggesting that this year’s class of 2014 graduates will face the most encouraging jobs market of any since the financial crisis.

This boost was driven primarily by the service sector.

Peter Hemington, a partner at BDO LLP, said: “We’re hearing that services firms are beginning to echo manufacturers in voicing their concerns over a shortage of skilled workers and some construction businesses are already turning business away due to a lack of trained staff. This could bring the stellar growth we’re enjoying in the wider economy to a grinding halt if the trend becomes entrenched.

“To address this, the Government must ensure its protectionist tendencies are put on hold until productivity returns to pre-crisis levels. Although a new wave of graduates will go some way towards meeting businesses’ needs, readily available and flexible labour from Europe could relieve pressure on businesses in the short term.”

The report also found positive signs in terms of business performance and optimism about the future.

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