At first glance, we've never had it so good.
Public spending has nursed the industry through the worst of the business cycle, the commercial sector is showing signs of new growth and last week's skills survey from the RICS showed that the industry's workforce is in robust health. The total number employed has passed the 2 million mark for the first time in 12 years and, believe it or not, site workers are starting to earn public respect (30 April, page 20). So why are some industry commentators warning that we are, in reality, in considerable economic difficulties?

The role of Private Frazer is presently played by Launce Morgan, chairman of the RICS' construction faculty; he is concerned that the growth in salaries is exceeding the rise in fee income, and that this could result in a sharp correction – and, presumably, the widespread distribution of P45s. And this week's Building/Hays Montrose salary guide backs him up (pages 42-46). It shows a labour market that is in the process of being overstretched, especially among surveyors. Everyone from partner and directors to graduates and assistant QSs are winning 7-8% pay rises.

The immediate danger is posed, ironically, by the same public sector demand that the industry has been relying on for the past three years. The rush to get PFI projects through before the next general election is demanding almost as many working hours from consultants as from lawyers, so if the office market really does return in full this year, it could create double-digit salary rises and lead to Mr Morgan's correction.

Many in the industry will no doubt argue that the true correction is to the legacy of underpayment for construction professionals. After all, £16-20k for a graduate QS is hardly a one-way ticket on the gravy train to Rich Street, at least in comparison with those entering accountancy or management consulting. Doesn't a consultant working on a major PFI hospital scheme or a project manager overseeing a vital rail upgrade deserve a decent package?

The problem, however, is not only with the pay itself. As with the rise in house prices, growth appears to be a symptom of the lack of capacity in the market, especially in the regions. The perennial moan of "you can't get the staff" seems to be spot on. As the head of a small consultancy who is struggling to fill vacancies put it to me recently: "It's not the package that we're offering that's the problem, it's finding the people to match it." In other words, the industry has a structural problem that stems from the bust of the early 1990s. The lack of graduates entering the industry in that period is now leading to the paucity of second jobbers in their early 30s. And what of first-timers? With some universities closing down long established industry courses, and the expected pick-up in demand for graduates in the City and among law firms this year, the threat of a graduate famine is real and growing. The sooner the Construction Industry Training Board and the RICS launch a campaign to market the industry to graduates the better – this year's university and school leavers are surely the ones to grab.