A SHORTAGE of skilled workers in manufacturing could prove a major barrier to growing the local economy, according to the results of a business survey.

A quarterly economic review by St Helens Chamber has revealed moderate growth for local industry with plans to expand in the final half of 2014.

But an obvious skills gap is proving a concern.

Manufacturing fared particularly well whilst recent improvements for the service sector have stalled, the survey of 161 chamber members found.

However, “confidence remains strong and both sectors have experienced improved cash flow”.

The number of firms operating at full capacity in both sectors is at its highest since 2008 when the recession took hold.

Employment growth fell short of expected levels but the number of jobs created is forecasted to be back on track in the third quarter.

Tracy Mawson, director of business services at the Chamber said the “results are more good news for the St Helens economy”.

She said: “Having charted slow but steady growth across most indicators throughout 2013, the first two quarters of 2014 have seen some of the best results in St Helens since the recession started in 2008.

“Although some of these high levels dipped slightly in the latest quarter, our survey demonstrates that job creation and confidence levels remain very positive.”

Nearly three quarters of businesses plan to grow over the next two years but an acute shortage of skilled technical staff in the manufacturing sector, particularly fabrication and precision engineering, is a major worry.

It means recruiting people with the “right skills gets much more difficult as the economy grows presenting business with a double edged sword”, added the director.