The Barclays Employers Survey 2015 has found that 61 per cent of UK manufacturing firms were planning to increase salaries this year, up from 56 per cent last year.
It comes against a backdrop of falling unemployment and wage growth outstripping inflation in recent months.
Over half, 52 per cent, said they were expecting to boost employee numbers, up from 48 per cent last year with a particular demand for senior management, junior management and skilled labour talent.
Just under a third, 32 per cent, said they had taken on apprentices over the past year with 36 per cent looking to take on more in 2015, up from 34 per cent in 2014. Four in ten of these apprentices are in engineering roles.
However the expansion comes despite only 41 per cent of manufacturers feeling more confident about the UK economy than they did 12 months ago. This compared to 59 per cent last year.
Mike Rigby, head of manufacturing at Barclays, said: “As confidence returns to the sector, it is encouraging to see businesses looking to recruit across a range of roles. That said, access to labour is clearly a growing issue for many. As order books grow and production capacity increases, it is imperative that businesses have the right people in the right jobs, be it via new recruitment or up-skilling existing staff, to ensure they are well-positioned for future growth opportunities.”
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Throughout all business sectors the survey, which talked to 666 firms, found that 67 per cent of mid-size businesses, turnover of £20m to £100m, are set to create new jobs with 82 per cent expecting to hike wages. However only 42 per cent of the smallest businesses, with a turnover of up to £5m, said they planned to take on new staff this year.
It found that 32 per cent of businesses were gearing up to take on apprentices compared to 29 per cent in 2014.
Other highlights of the survey included the revelation that 78 per cent of vacancies in the last 12 months have been filled from within the UK. Just under a quarter said they had hired employees from inside the EU and 7 per cent from outside the EU.
Barclays added that 77 per cent of businesses had also told its survey that they think that sales lead to job creation as opposed to the other way round.
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