As a result of the yawning skills gap over a quarter of firms say they are being forced to turn down work.

The alarming findings are highlighted in the latest National Specialist Contractors Council state of trade survey.

The capacity squeeze has hit home after significant increases in both enquiries and orders.

During the first quarter two thirds of specialist subcontractors reported an increase in enquiries, up 27% on the previous quarter, and just over half reported a rise in orders.

But nearly half of all specialists surveyed experienced more difficulty in recruiting skilled labour this year compared to just 2% who found it less difficult.

The balance of recruitment difficulty, measured as the difference between those reporting more and less difficulty, reached its highest level since 2001 because of a lack of applicants with required skills.

This skills shortage meant 28% of firms complained they were unable to bid for work, which is higher than at any time since the recession.

The skills crisis is continuing to impact on prices. A record 54% of respondents experienced an increase in tender prices last quarter, which has doubled since this time last year.

Suppliers’ prices are also rising in line with demand with 82% of specialist contractors seeing higher prices from their suppliers for the second quarter in a row.

Any uncertainty in the run up to last week’s election appears not to have undermined the confidence of specialist contractors with 65% anticipating an increase in workload in the next quarter and a record 78% anticipating an increase over the coming year.

NSCC chief executive Suzannah Nichol said: “The growing construction market is great news for specialists contractors but we need to tackle head-on the skills crisis that is facing the industry.

“If we do not invest in recruiting and training people with the right skills, the industry will not be able to meet demand and this will impact on the wider UK economy.”