Migrants ease building shortages

The influx of workers from eastern Europe has almost eliminated skills shortages in the building trade in London and the South-east, an industry report showed today.

Just one in 10 companies reported recruitment problems in the powerhouse of the UK economy in the final months of the year, it said.

The finding, in the quarterly survey by the Royal Institution of Chartered Surveyors, was the lowest reading for the region in its 10-year history.

"Low skill shortages in the capital are helping firms limit wage, cost and price pressure," Rics' senior economist David Stubbs said. "The influx of labour from EU accession countries has limited wage rises."

However, the picture was not reflected across the country. In the north of England, more than seven out of 10 respondents complained of skills shortages. "This may reflect differences in the pattern of inward migration from eastern Europe," he said.

The presence of Poles in trades such as building and plumbing has been a feature of London life for years, but the phenomenon took off in 2004 when Poland and seven other eastern European countries joined the EU. It is estimated as many as 600,000 have come to the UK since then.

The Bank of England has consistently argued that net migration helps to reduce the pressure on wages in particular sectors of the economy.

Overall, the Rics survey showed growth in construction workloads accelerated to the fastest rate since the second quarter of 2004, boosted by a strong economy and a robust housing market.

It said 26 per cent more surveyors reported a rise than a fall in output in the three months to December, up from 21 per cent in the previous quarter.

The increase was boosted by rising activity in private commercial property and private housing, which have both grown above their long-run survey averages for five consecutive quarters.