Employment in Coventry moved closer to pre-pandemic levels last month as hundreds of workers joined company payrolls, figures show.
But with the number of job vacancies across the UK hitting a record high, employers fear staff shortages could stall future growth following the lifting of lockdown restrictions.
Office for National Statistics data shows an estimated 150,893 people in Coventry were on company payrolls in July – 864 (1%) more than in June.
The increase moves the figure closer to the 150,970 recorded in February last year – the month before the UK was plunged into its first Covid-19 lockdown.
The data also showed the median monthly salary for payrolled workers in the area rose from £1,763 in February last year to £1,871 in July this year – a £108 increase.
Across the UK, the number of payrolled workers increased by 182,000 between June and July to 28.9 million – but this was still 201,000 fewer than in February last year.
The ONS cautioned the payroll figures, which do not include the self-employed, are early estimates which can be revised in future months.
The Confederation of British Industry said they showed signs of recovery but added increased demand for workers was creating a new problem for companies.
The number of vacancies across the UK reached almost 1 million in the three months to the end of July – the highest estimated quarterly figure since records began in 2001.
Arts, leisure and food service firms particularly contributed to the surge in job openings.
CBI's head of employment, Jennifer Beckwith, said: "With employment up and unemployment down, the labour market is showing further signs of recovery.
“Yet, with vacancies at a record high, employers are concerned that staff shortages are stalling their ability to grow and support the country’s wider economic recovery."
She said the Government should help by funding training for in-demand qualifications and removing barriers which stop firms being able to recruit from abroad.
Separate figures published by the ONS also show in the Coventry local authority area, there was a fall in the number of people claiming unemployment benefits last month.
Around 15,320 people were on out-of-work benefits as of mid-July, down 375 from 15,695 in mid-June.
It meant 6% of the area's working population sought support in July, compared to 6.3% a month earlier.
The figures include those aged 16 to 64 on Jobseeker’s Allowance and some Universal Credit claimants, who are unemployed and seeking work or employed but with low earnings.
Chancellor Rishi Sunak said the July data showed the job market was recovering nationally, despite the winding down of the furlough scheme, which will end in September.
He said: "The figures show that our plan for jobs is working – saving people’s jobs and getting people back into work.
“I know there could still be bumps in the road, but the data is promising – there are now more employees on payrolls than at any point since March 2020 and the number of people on furlough is the lowest since the scheme launched.”