Britain’s largest businesses plan to expand recruitment next year despite continuing worries over a shortage of skilled workers and the impact of Brexit.

Two out of five firms will recruit more staff in 2017, according to research that also found growth in permanent jobs will outstrip temporary recruitment for the fourth year in a row.

But the survey by the CBI, which covers 350 mostly large businesses, revealed that uncertainty over the UK’s future relationship with the European Union has shaken business confidence in the labour market.

Skills shortages were said to be the biggest threat to competitiveness, with over half of those polled concerned about future access to skilled migrant workers.

The survey follows a steep fall in employment growth in recent months according to official figures and concerns among economists and ministers that a squeeze on workers’ incomes next year will undermine the UK’s recovery.

The Office for National Statistics will publish its third estimate of GDP growth in the three months to the end of September later this week, which is expected to confirm the previous figure of 0.5%, but indicate a weakening in the months ahead.

Inflation has already jumped from zero to 1.2% this year and is forecast to move up to 3% or 4% by the end of 2017, while wages growth remains stuck at around 2.5%.

Josh Hardie, the CBI’s deputy director general, said many employers would be expanding their workforce, but with trepidation as economic uncertainty remained high.

“This year’s survey does show a greater sense of concern about the UK’s long-term attractiveness as a place to create jobs.

“Getting our industrial strategy right and understanding what the UK’s future relationship with the EU will be will help ensure that this worry does not negatively impact the future performance of the labour market,” he said.

He said it was clear businesses wanted more certainty about the Brexit negotiations and what it would mean for EU staff in the UK and those they might want to attract in the future.

“The government should build on the positive moves it has already made to dispel uncertainty by drawing up plans for a smooth transition, giving firms both the time to adapt to new regulations and the confidence to invest beyond 2019,” he added.

Carmen Watson, chairman of employment group Pertemps, which helped with the annual employment trends survey, added: “2016 may have been a year of uncertainty for businesses but what we are seeing, looking ahead to 2017, is renewed optimism with employers continuing to invest in their workforces, leading to jobs growth across the UK.

“However, skills gaps remain a concern for employers as having the right people with the right skills is crucial for any organisation’s performance.”

Almost a third of firms said they expected to create apprenticeships, while most reported positive employee relations.