Nearly half of businesses in Yorkshire and the Humber expect to grow their workforce this year.
But almost two-thirds of businesses say limited access to labour is a threat to competitiveness.
That's according to the CBI/Pertemps Network Group report released today.
Beckie Hart, CBI Yorkshire and Humber regional director, says: "While the job market in Yorkshire and Humberside is in good health, these latest figures make clear that labour and skills shortages are already biting hard.
"The figures also show a worrying trend that there aren’t enough sufficiently skilled people to fill the number of job vacancies.
"While it is encouraging to see firms are investing in training their staff and helping them develop new skills, this investment alone is not the silver bullet that will meet all our needs.
"Business and the Government need to plug the skills gap and champion the flexible labour market on which our economic strength relies, to ensure investment continues to flow in."