SMALLER firms are being hit by a growing shortage of skilled workers which is proving to be a "significant barrier" to growth, according to a new report.

The Federation of Small Businesses (FSB) says construction and computer services are being particularly badly hit.

A survey of nearly 2,500 firms showed almost a third reported problems recruiting suitably skilled employees.

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John Allan, FSB chairman, said: "As the labour market continues to tighten alongside the economic recovery, skills shortages will continue to be an increasing concern for more businesses.

"While this helps to boost the wage bargaining power of workers with the right skills, it poses a risk to the momentum of economic growth and once again underlines a long standing structural weakness in the UK economy.

"Despite the emergence of a skills shortage, these results show small firms are still feeling very confident, with every intention to invest and grow."