The latest Construction Trade Survey shows that activity in construction rose for the second consecutive quarter in Q3. Furthermore, this growth was reported by firms across all areas of the industry; building contractors, SMEs, specialist contractors, civil engineers and product manufacturers.
Commenting on the survey, Noble Francis, economics director at the Construction Products Association, said: 'It was encouraging to see that the recovery, which started in Q2, has continued into Q3. A balance of 43% of contractors reported rises in activity, the second highest level since pre-recession 2007. Although private housing is clearly driving industry growth, all construction sectors enjoyed increases in output. With rises in new orders and enquiries, the industry clearly expects that the recovery in output will continue over the next 12 months.

'Construction tender prices in Q3 also increased for the first time in over four years, with 4% of firms, on balance, reporting a rise. However, higher costs, most recently due to increasing labour costs, offset this. As a result, 11% of firms, on balance, reported that profit margins in the industry declined in Q3.

'Overall, only 7% of firms reported difficulty in recruiting trades to work on construction sites. However, the breakdown of trades highlights that 34% of firms reported difficulties in recruiting bricklayers and 32% of firms reported difficulties recruiting plasterers due to the sharp increase in private house building in recent months.

Stephen Ratcliffe, director UKCG, said: 'These results are more encouraging signs of a turn round in the construction. Housing, as the leading indicator, is still the main growth driver and general construction still has some catching up to do. Nevertheless, the mood music amongst UKCG members is more positive than it has been for some time.'

Julia Evans, chief executive of the National Federation of Builders added: 'Confidence is returning to the industry and we are seeing measurable signs of growth and a healthy number of orders. However, the cost of doing business continues to rise as materials and labour cost increases far outpace revenues.

'Repair and maintenance continues to fall behind all other areas in construction and this could be taken as further evidence that the Green Deal is not yet taking hold. Furthermore, cutting the Energy Companies Obligation would further depress retrofit activity as it is the only scheme currently generating any significant output in this sector. We need greater promotion of all the options for retrofit and not get tied up in the red tape of the Green Deal.'

Key survey findings include:

· 43% of building contractors, on balance, stated that activity rose in Q3, the second highest balance since 2007
· Private new housing was the key driver of construction growth in Q3 with 22% of contractors, on balance, reporting that activity rose in Q3 compared with a year ago
· Building contractor new orders reached their highest level since 2007
· The most positive sector for new orders was public non-housing, which primarily covers education and health, with a balance of 9%
· 49% of building contractors reported that costs rose in Q3, with labour costs and materials costs both contributing to the rise
· A balance of 4% of building contractors reported that tender prices rose in Q3; however, with costs also rising, a balance of 11% reported that profit margins had continued to fall
· Only 7% of building contractors, on balance, reported that they had difficulties recruiting trades. Within the trades, however, 34% of building contractors reported difficulties recruiting bricklayers and 32% reported difficulties recruiting plasterers, the highest levels since 2008.