Strong housing market and influx of EU workers boost construction activity according to RICS survey

Workloads increased at the fastest rate last quarter since 2004 thanks to a strong housing market, according to the Royal Institution of Chartered Surveyors.

A survey conducted by the RICS found 26% more surveyors reporting a rise in output compared to the last three months of 2006. The increase in workloads has boosted activity in both private commercial property and private housing.

The RICS said that the influx of EU workers had dampened wage rises in London and the South East. Reported difficulties in recruitment in the region also fell to their lowest ever recorded in the survey.

RICS senior economist David Stubbs, said: 鈥淐onstruction industry workloads have strengthened on the back of a stable UK economic climate and an extremely robust housing market. The influx of labour from EU accession countries has limited wage rises in the capital but projects such as the Olympics and Thames Gateway could contribute to upward wage pressures as demand for labour increases throughout 2007.鈥�

In the rest of the country, 32% more surveyors reported difficulties in recruiting tradesmen. Additionally, the survey found the construction industry experiencing a severe shortage of professionals.

The RICS survey found that surveyors confidence in the future to be at the highest levels since the fourth quarter of 2004, although there were concerns that high energy costs could impact on margins in 2007.