Businesses are looking to branch out but could be hampered by inadequate skills as companies’ hiring intentions are expected to hit a record high in the summer, says business advisor BDO in its latest Business Trends report.

BDO’s employment index, which predicts hiring intentions over the next three months, jumped to 107.7 last month from 105.6 in April.

The figure was just under the Index’s 22-year record high of 108.9, recorded in February 2007 before the credit crunch and global financial pinch set in.

BDO welcomed the news but expressed caution about the risk posed by skills shortages to certain industries such as engineering and manufacturing.

Peter Hemington, Partner at BDO, said: "UK businesses are translating their confidence in economic recovery into action, demonstrated by the sustained increase in hiring expectations.

“But a gap between supply and demand for skilled workers is developing, which could take the momentum out of the recovery."