THE Thames Gateway and the Olympics are two major development projects in the South East acing shortages in skilled labour, the Royal Institution of Chartered Surveyors (RICS) has warned.

According to its latest figures, the growth in contruction output has accelerated for the third consecutive quarter, pushing up skills shortages.

Trevor Hines, RICS South East regional director, said: "A skills gap in the industry is clearly evident and should be taken as a warning sign for projects such as the Olympics and Thames Gateway."

Between April and June, workloads increased at the fastest pace since 2004, with the strongest activity within the commercial and infrastructure sectors where infrastructure work doubled its pace of expansion on the back of Government investment in roads.

However, over a third of chartered surveyors have reported difficulties in the recruitment of tradesmen, both skilled and unskilled, the highest level since the first quarter of 2005, with the worst affected areas being the South East and London.

The survey reports that the construction industry is also experiencing a severe shortage of surveyors and construction professionals.

Cost pressures in the industry are also viewed as strong due to high energy and raw material prices, with surveyors noting sharp rises in copper and steel prices, and for metals more generally.