Firms in England and Wales’ food and drink sector will create 73,000 jobs in the next five years, according to a new study by Lloyds Bank Commercial Banking.

The report, Investing for Growth, found confidence was strong across Britain’s biggest manufacturing sector, with firms planning to develop innovative new products and increase export activity. The second annual study, which surveyed English and Welsh producers of alcohol, fresh produce and food and drink products also found that just over a third (34%) of those surveyed plan to drive business growth through job creation.

However, with the sector facing the retirement of hundreds of thousands of workers by 2020, over a quarter of survey respondents (28%) cited a lack of skilled labour as one of the biggest challenges.

Investing for Growth also found that the majority of producers (72%) plan to enter new international markets in the next five years, up from 63% in 2014.

Andrew Connors, head of mid-sized business at Lloyds Bank Commercial Banking, said: “The contrast between the 2014 report and our latest research is really positive, with significant job creation and investment figures revealed.

“Productivity presents an ongoing challenge for the UK economy. Against this backdrop, the continued commitment from food and drink manufacturers to drive productivity and innovation through R&D is a clear indication of the crucial role this sector plays in the broader economy.”

Ian Wright, director general at the Food and Drink Federation (FDF), commenting on the findings of the report, said: “Britain’s food and drink industry is world-class.

“Although many of the most dynamic and best-loved food and drink brands originate here in the UK, our producers are exporting innovative techniques and ways of working worldwide. This report confirms that trading internationally is a real driver for growth, especially with the opportunities offered by non-EU markets and developing economies.

“Our continued and growing success abroad speaks to the popularity of UK plc and our food and drink manufacturers’ track record of producing original, quality products.”

The survey of 113 English and Welsh food and drink firms was conducted by Coleman Parkes Research in June 2015.