NORTH SHIELDS, ENGLAND — Andrew Esson has plenty of workshop space to expand his small, thriving company that designs and makes hydraulic equipment here in the northeast of England. His investors have offered more financing should he need it.

Even his bank is supportive.

His problem is people — more specifically, finding enough skilled engineers. And it is a shortage of a type afflicting much of British industry that some experts worry could help tip the country into its third recession since the financial crisis.

When Mr. Esson’s advertisement for a design engineer and an experienced technician produced no suitable applicants last year, he decided to train apprentices instead. Even that proved impossible until he widened the search beyond those leaving the closest secondary schools — despite the fact that more than one in five young people are unemployed here in this pocket of the Tyneside area of around 830,000 people.

With the right pool of skilled talent, Mr. Esson thinks he could have won extra orders worth £700,000 to £800,000, or $1.1 million to $1.3 million, a year for his company, Quick Hydraulics, which had revenue of £3.1 million in 2012. Its primary business is designing and building hydraulic power units for businesses including military contractors and paper producers.