The number holding at least a level 3 qualification has risen by ten percentage points to 58 per cent in the past two years, the 2005 Childcare and Early Years Providers survey found.
Full daycare places are continuing to rise, as the shift away from sessional care to full daycare continues. The number of providers offering full daycare rose from 9,964 in 2003 to 11,811 in 2005. In the same period there was an increase of 79,000 full-time-places and 23,000 out-of-school places.
Children's minister Beverley Hughes said the research showed the 'encouraging state of the childcare market'.
But the survey also points to low occupancy levels and a fall in the number of providers breaking even or making a profit.
Purnima Tanuku, chief executive of the National Day Nurseries Association said, 'We are very concerned that a fifth of daycare providers are making a loss and around half are only breaking even, pointing to a worrying trend of unsustainability. Even a break-even position is not an indication of a healthy sustainable market - childcare providers need to make a surplus to invest back in the setting and remain sustainable.'
She added, 'Although nurseries are spending more than 82 per cent of expenditure on staffing costs, even senior managers are falling well short of the national average earnings.'
However, speaking in Parliament last week, Ms Hughes said the survey showed that the average level of pay for staff working in group settings had 'increased across the board in 2002-05 by 16 per cent on average for hourly pay. That compares well with a 10 per cent increase for the UK as a whole.'
She added that the Children's Workforce Development Council would report to her by September on pay and conditions and on how this could improve recruitment and retention.
A separate survey into childminding found there are 57,650 active childminders caring for 243,150 children. It noted that 18 per cent of childminders registered with Ofsted were not currently in childminding.
Andrew Fletcher, director of policy at the National Childminding Association, said the slight discrepancy was because childminders 'work flexibly and care for different children and different times'. Ofsted's figures indicate the number of childminders has risen in the past year.
The surveys, including reports on out-of-school and sessional care, are available at www.dfes.gov.uk/research.