Construction output in the first quarter of 2005 showed no change compared with the previous quarter and was 2 per cent lower than the first quarter of 2004.
The bulk of the Olympic works will affect construction activity from 2007, adding 1.5-2 per cent to the South East's workload.
Output is forecast to rise by 1.3 per cent this year, by 2.1 per cent in 2006 and by 4 per cent in 2007.
Tender prices are forecast to rise nationally by 4.8 per cent in the next year and by 3.4 per cent in the year to the third quarter of 2007.
Tender prices in London are set to rise by 5.7 per cent in the next year and 5.3 per cent the year after.
Skilled labour costs increased by 0.4 per cent in the past three months and by 8 per cent since September 2004.
Materials' prices rose marginally in the past three months and by 2.4 per cent since September 2004.
The private commercial sector is set to grow by 4 per cent in 2005, 6 per cent in 2006 and 5 per cent in 2007.
Infrastructure output should fall by 1 per cent in 2005 but rise by 2 per cent in 2006 and 8 per cent in 2007.
Investment in health and education should boost public non-housing output by 5 per cent in 2005, 2006 and 2007.