LABOUR shortages are causing major headaches for Greater Manchester businesses, it is claimed.

Almost half (45 per cent) of the region's employers had difficulty recruiting skilled employees during the last six months of 2002, according to the Business in Britain survey by Lloyds TSB Corporate.

And just under one in three (29 per cent) companies said they had struggled to recruit unskilled staff -- two per cent above the national average.

The worst-hit sectors are construction, retail, transport and communications.

A quarter of all firms said they had increased their spending on staff training during the same period, while 31 per cent were planning to increase staff development budgets in the first six months of 2003.

Dave Allanson, relationship director for Lloyds TSB Corporate in the North-west, said: "The failure during the last decade to bridge the skills gap in the North-west poses a serious long-term threat to continued economic growth.

"Construction firms in particular are struggling to recruit, and Government moves to influence the balance of the education system's focus between academic and vocational skills will take time to make a significant impact. Despite the shortages, many North-west firms will be reluctant to tackle the problem simply by offering higher salaries."

Roy Cavanah, labour and training manager at Leigh-based builders G and J Seddon, said: "The business can often be uncertain and many people don't like the idea of being able to earn £500 one week and nothing the next. Luckily, in Bolton there are excellent services to encourage young people into the trade."

"These include the Curriculum centre at Bolton College, where youngsters can learn skills of the trade, such as bricklaying, while still in school."

Marie Ashall, North- west regional director for industry body the National Federation of Builders, said: "We are working closely with schools and colleges across the North-west to build stronger links with the industry and promote the wealth of careers on offer."