TOKYO (REUTERS) - The number of foreign workers in Japan surpassed 1 million for the first time last year, as the labour-strapped country struggles to find enough Japanese workers.

Slightly over a million foreigners from countries such as China and Vietnam were working in Japan as of last October, labour ministry data showed on Friday (Jan 27).

That was up nearly 20 per cent from the previous year and a new record for the fourth straight year.

The figures suggest Japan is increasingly turning to workers from overseas to plug its labour shortages despite its reluctance to accept foreigners.

Japan is facing its worst labour crunch since 1991 amid a shrinking and ageing population, which has prompted calls from the International Monetary Fund to accept foreign workers to boost economic growth.

Prime Minister Shinzo Abe has said the country should put more Japanese women and the elderly to work first before accepting immigrants, but policymakers are exploring ways to bring in more foreign workers without calling it "immigration".

In December, the government expanded the scope of a system for accepting trainee workers from developing countries, while also creating a new visa status for nurses and domestic helpers.

It also aims to court highly skilled foreigners such as academic researchers by easing the path to permanent residency.

The labour shortage is especially severe in the construction sector, where demand has spiked ahead of the 2020 Tokyo Olympics and for rebuilding following the 2011 earthquake and tsunami.

Over 41,000 foreigners powered the construction industry as of last October, up from around 29,000 the previous year.

In November, there were over eight times as many job offers for putting together steel construction frames as there were workers, separate government data showed.

"We have on-site managers through our company, but the people who actually do the work, that's where we lack skilled labour," said a manager at a major Japanese construction company. "That's where we have to find the people, and why we are trying to open gates to immigrants."

Workers from China made up over 30 per cent of the foreign labour force, rising 6.9 per cent from the previous year.

Vietnamese workers were in second place, accounting for around 16 per cent of the total foreign workers but up over 50 per cent compared to the previous year.

A Reuters investigation last year showed how asylum seekers, some of whom are banned from working, are working on public works projects amid a shortage of Japanese construction workers.

The trainee system, whose aim is to train foreign workers so they can bring skills back to their home country, is often used by labour-strapped companies to secure workers.

The programme has been long dogged by cases of labour abuse including illegal overtime and unpaid wages, prompting criticism from Human Rights Watch and the US State Department.

Nearly 20 per cent of foreign workers were trainees as of last October, labour ministry data showed, rising by over 25 per cent from the previous year.