The overall impression gained from the third quarter business survey conducted in the building industry by the Bureau for Economic Research (BER) is that the upswing in the building cycle is continuing and that it has become more broader based compared to the situation earlier in 2004, the bureau reported yesterday.

"In this regard, non-residential sector building activity, which until recently was comparatively sluggish, has rebounded strongly during the survey quarter," a statement released by BER said.

"Rising reports of skilled labour shortages are a cause for great concern and could in time adversely impact on the longevity of the current upswing in the building cycle."

Building activity in the residential sector reportedly remains buoyant and the business confidence of respondents in this sector continues on a high level, BER reported.

No less than 87% of participants polled were reportedly satisfied with current business conditions.

BER said the current favourable business environment is expected to continue during the fourth quarter of 2004.

"In the case of the nonresidential sector, building conditions have shown a further notable improvement and indications are that the demand for non-residential building work is recovering over a relatively broad front," the statement said.

Respondents to the third quarter survey anticipate a further improvement in building activity during the coming quarter and business confidence in the civil engineering industry has shown an improvement over the past quarter.

"Nevertheless, construction activity remains sluggish, thereby exerting downward pressure on profit margins. Expectations are that conditions could take a turn for the better during the last quarter of the year," the report concluded.