THE North West is facing a growing skills shortage, according to a new survey by Lloyds TSB Commercial.

A total of 42 per cent of companies taking part in the bank's twice-yearly business in Britain survey reported increasing difficulties in recruiting skilled staff over the last six months.

And 24 per cent said that finding unskilled staff had also been a problem.

Derek Woodhead, area director of the bank, said: "Local demand for skilled labour is far outstripping supply.

"Heavy investment across the region and a buoyant economy has created a wealth of job opportunities in certain key sectors."

He added: "There is a very real danger that the current shortage could hamper continued growth and it could even mean the difference between success and failure for some businesses.

"What is more surprising is that, despite the recruitment problems facing them, companies still don't seem prepared to offer the higher salaries needed to retain and attract people with the right mix of skills."

The construction industry emerged as the hardest hit, with nearly two in three companies reporting a skills shortfall.

Information technology, business services, manufacturing, transport and communications companies also suffered.