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A mini-boom at Tyneside engineering and shipbuilding companies has resulted in a 40 per cent increase in craftsmen's pay and warnings of skill shortages. Having suffered more than most regions from the recession and the decline in heavy industry, companies on the Tyne are now seeing a resurgence in business and have been trying to recruit skilled workers.

At Swan Hunter, craftsmen and technicians are now being paid pounds 8.39 an hour compared with the pounds 6 an hour they earned when the group was in receivership three years ago. Most companies in the area have lengthened the working week from 37 to 39 hours with wages at Swan increasing from pounds 218 a week to pounds 327. 21. The yard, now under Dutch ownership, recently won a pounds 50m order to refit a Swiss-owned pipe-laying vessel. Its workforce had declined to around 250, but is now up to 750.

Davey Hall, president of the Amalgamated Engineering and Electrical Union, said most of the yards along the Tyne seemed to be busy and that was reflected in wage packets. "Skill shortages are beginning to bite and they have to pay to get the experienced people. There used to be thousands of apprentices at companies in the area, but now few are coming through and employers are being made to pay the cost of their previous neglect," he said.