MORE North-west manufacturing companies are finding it hard to recruit skilled employees.

A new survey shows that nearly half the manufacturing firms in the region are now experiencing increasing difficulty.

This compared with one third in the final quarter of 1996.

The North West Chambers of Commerce Quarterly Economic Survey survey, which is being sponsored by the Royal Bank of Scotland for the first time, also shows that manufacturing exporters in the region are being hit by the strength of the pound overseas.

There was a sharp drop in the balance of manufacturing exporters reporting an increase in both export orders and deliveries in the first three months of 1997.

Service companies which export have also suffered from the appreciation of sterling, although to a lesser extent.

But overall, the survey showed that North-west firms enjoyed a strong first quarter of the year with almost half of all the service companies reporting increased work and orders during the period.

A similar proportion of manufacturing companies reported higher deliveries and orders in their domestic market.

Slightly more manufacturers than service companies reported a fall in orders and deliveries during the first quarter. A healthy balance of firms in both sectors are continuing to take on staff and the survey suggests that trend is expected to continue strongly during the second quarter.

However, there are signs that manufacturers are beginning to scale back their plans for investing in equipment during the next 12 months, with almost one in four firms reporting that they had scaled back their investment plans during the past three months.

Only one in three firms had revised their plans upwards.

Mr Miles Middleton, Director of the North West Chambers, said: "The figures suggest a very robust performance in the first quarter of 1997 despite the slight decline in a number of the indicators compared to the survey covering the final quarter of 1996."

Mr Richard Taylor, Deputy Chief Economist at the Royal Bank of Scotland said: "The concern among manufacturers about the impact of sterling on their prospects comes as little surprise.

"But companies remain very optimistic about the future and the North-west economy is set for a period of strong performance."

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