Business leaders in Coventry and Warwickshire say companies are struggling to recruit after vacancies hit a national high.
The latest figures from the Office for National Statistics show that unemployment across the country dropped to 4.1 per cent between October and December, leaving it just a fraction higher than when Covid-19 first struck.
A new national record of 1.3 million job vacancies was set in the final quarter of the year, with employers expanding their search for skilled workers.
Sean Rose, head of policy at the Coventry and Warwickshire Chamber of Commerce, said: “The rate of unemployment hasn’t hit the heights that many were expecting and it is now virtually at pre-pandemic levels, which is positive news for the economy.
“However, we are seeing firms struggling to recruit the people they need to be able to grow their business.
“At a time of rising costs and supply chain headaches, businesses are being hit by a range of issues at a time when they want to focus their energies on growing and ensuring we build a sustainable economic recovery from the crisis of the past two years.”
British Chambers of Commerce Head of Economics Suren Thiru said: “The increase in payroll employment in January suggests that Omicron had little effect on the UK labour market as demand for workers remained robust.
“While it is encouraging that payroll employment is rising and unemployment continues to fall, the strong headline figures mask significant underlying challenges.
“Record vacancies underscores the critical hiring crisis facing firms. With high economic inactivity indicating that many people have left the jobs market altogether, chronic staff shortages are likely to weigh on the UK economy for a sustained period.
“With regular pay growth slowing, inflation is comfortably outpacing wages, weakening household finances further. Despite recruitment difficulties, the damage being done to business cashflow from a myriad of cost pressures are limiting the extent to which wages can rise.
“While Omicron is having little impact on employment, the squeeze on firms’ finances from high inflation, soaring energy bills and the looming national insurance hike is likely to weaken job creation and further restrain pay growth in the coming months.
“The government must do more to help people access rapid retraining opportunities for in-demand jobs, including helping older workers to pivot to more sustainable jobs. Delaying the looming National Insurance rise would give firms the financial headroom to retain and recruit people.”