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An influx of foreign labour is unlikely to solve a skills shortage in the forthcoming construction boom according to the Royal Institution of Chartered Surveyors.

The May 2006 RICS economic survey said migrant labour is unlikely to sustain predicted annual growth in construction of 1%.

Three quarters of QS firms have reported to the RICS that they've tried recruiting over the last year, which the report says shows an industry "still in expansion mode".

Growth has been led by private sector investment, with industrial and commercial construction work up 25% on a year ago. The upturn in work across the industry has boosted construction wages 5.1% over the last year.

The report added it expected public sector investment to keep rising thanks to further increases in government spending.

EC Harris is also making positive noises in its quarterly economics survey for summer 2006. It predicts tender prices will rise nationally by 3.5% over the next year, and 5.3% in London. Nationally prices are expected to rise 3.7% in the year to the second quarter of 2008.

The firm makes more positive noises that the RICS about construction output, predicting a rise of 1.5% this year, 2.8% in 2007 and 3.7% in 2008. According to EC Harris, the main drivers for the recovery are expected to be the private commercial and housing sectors.

Contractors' input costs went up again too - 0.6% in the past three months - with materials' prices sneaking up 0.2%.