According to the latest construction market survey by the Royal Institution of Chartered Surveyors (RICS) confidence in construction workloads is on the up despite a slowdown in workloads in the last quarter.

The survey showed that construction workload growth slowed in second quarter 2007, but was still firm and above the long term average. In quarter one growth was 28%, but it dropped to 16% in the last three months.

The industry saw an evenly distributed slowdown in activity, save for the public housing sector which went against the tide and continued its increase at the same rate as in the first quarter.

In the non-housing public sector workloads went down for the first time since quarter one 1999. In the last quarter Scotland saw the biggest expansion in workloads, and of all the other regions only Northern Ireland did not see a fall in the rate of expansion.

The confidence of RICS surveyors in future workloads was still high, and the results from quarter 2 marks the fourteenth consecutive quarter of confidence above average.

The underlying strength of the housing market and the wider economy is helping to drive construction industry confidence, and profit outlook for the next twelve months has the same feeling with confidence higher than the long term average for the first time in over a year.

Other sectors of the economy are showing multi-year highs with capacity constraints being reached and domestic demand booming so the construction industry is in line with other sectors.

Skill shortages in construction were down with 29% of survey respondents reporting difficulties compared with 32% in quarter one. It appears that the in-flow of workers from Eastern Europe has assisted labour needs. Conversely skill shortages for professionals are still high, with 54% reporting recruitment problems.

Senior economist at RICS, David Stubbs said that the immediate outlook was bright, with the slowdown of quarter two set against very strong growth in quarter one. Construction projects in the public housing sector were leading the way, and the construction boom appeared to be steady and sustainable.