THE Thames Gateway and the Olympics are among major development projects in the South East facing shortages in skilled labour, warns the Royal Institution of Chartered Surveyors (RICS).

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

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

RICS South East regional director Trevor Hines said: "Construction industry workloads have strengthened on the back of a stable UK economic climate and healthy global conditions. A strong financial services sector has seen the South East and London outstrip the rest of the country, increasing the demand for labour.

"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.

The survey reports the industry is also experiencing a shortage of surveyors and construction professionals. Cost pressures are also viewed as strong due to high energy and raw material prices, with sharp rises in copper and steel prices, and in metals more generally.