The construction Confederation has called on the government to maintain its present level of capital spending on construction despite the sector's labour shortages.
A survey compiled by the Learning and Skills Council, a government training agency, found that construction had the second worst recruitment problems in British industry. Only the wood and paper sector in the top 10 industries with recruitment problems.

The National Employer Skills Survey said these skills shortages in construction had led to excessive overtime payments for some employees.

Stephen Ratcliffe, the Construction Confederation's chief executive, said it was important that contractors needed a steady flow of work if they were to invest in recruitment and training. He added that, as the government was the most important client for many contractors, it was obliged to maintain spending levels.

He said that despite the shortages highlighted by the survey, he was not aware of contractors losing work because of a lack of labour.

He said: "Firms are more likely to be extending work programmes and deferring start dates to accommodate any anticipated difficulties."