MOVES to clamp down on immigrant workers should be halted to enable companies to overcome rising skill shortages, according to a senior regional business advisor.

Terry Jones, head of accountants and business advisors BDO in Yorkshire, urged ministers to put

'protectionist tendencies' on hold until productivity returns to pre-crisis levels.

His comments came as the latest BDO Business Trends report revealed hiring intentions in the region are at their highest level since 1998 . Its employment index, which predicts companies’ hiring intentions in three months’ time, rose from 108.8 in June to 109.6 in July, indicating that job creation will continue to accelerate for the remainder of the year.

BDO said a significant increase in hiring intentions among services firms had driven July'’s gains, suggesting that new graduates, many of whom will be looking to start their careers this summer, face the most encouraging job prospects of any graduation class since the financial crisis.

Terry Jones, partner and head of BDO in Yorkshire, said: “The good news is that the unprecedented growth we’ve seen in employment this year looks set to continue, providing this year’s university graduates with a welcome dose of good news in terms of job and salary prospects.

“However, 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 buoyant services sector also positively influenced the BDO Output Index, which predicts companies’ performance three months ahead. Economy-wide output rose from 103.6 in June to 103.7 in July, mirroring the 0.1 rise reported by the Output Sub-Index for the dominant services sector, which accounts for over two-thirds of the economy.

The BDO Optimism Index, which predicts businesses’ expectations for the next six months, rose from104.8 in June to 105.1 in July, among both services and manufacturing firms. Optimism levels were at their highest for more than a year, indicating continued medium-term economic growth although BDO said the rate of business confidence growth seemed to be levelling off.