The Federation of Small Businesses’ Small Business Index, which measures business confidence, rose to 39.7, breaking the previous score of 35.7 per cent in Q1 this year.
But it also found that 29.9 per cent said a lack of skills was hampering their growth, with particular shortages in IT and construction.
The group said that businesses and educators should work more closely together to ensure students are ready for the world of work, and employability skills should be embedded from an early age. It also called for changes to apprenticeships and traineeships.
John Allan, FSB national chairman, said: “As the labour market continues to tighten alongside the economic recovery, skills shortages will continue to be an increasing concern for more businesses.
“While this helps to boost the wage bargaining power of workers with the right skills, it poses a risk to the momentum of economic growth and once again underlines a long standing structural weakness in the UK economy.
“Despite the emergence of a skills shortage, these results show small firms are still feeling very confident, with every intention to invest and grow. This will provide further momentum to the recovery, especially in terms of jobs growth.”
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