But much of the uplift is being offset by a lack of orders at its major projects division.

In a mixed trading statement this morning Balfour also warned its UK rail projects business would deliver a modest loss over the year.

It also said that the outlook for its engineering services division, which relies on major infrastructure and complex buildings for growth, remained subdued.

Across the group, the firm  remained on course to exceed market expectations for 2013, helped by sales of investments, its FM business disposal and streamlining of UK operations.

“We expect the ongoing recovery in the housing market to feed through into increased work for our regional business, in particular our regional civils business.

“However, we need to remain vigilant about cost escalation and the risk of subcontractor failures as their balance sheets will come under increasing pressure due to increasing working capital requirements as and when their volumes pick up,” the firm said in its statement.

It warned that the uplift at Mansell and its regional civil engineering side in the third quarter would be offset by a failure to secure major road and civils work.

“In the major projects business, there continues to be an absence of large infrastructure projects.

“The visible pipeline looks weak, and we see little prospect for change in the next couple of years. We therefore anticipate a continuing shift in our business mix away from major infrastructure and into regional work.”

Balfour said profitability in construction services improved in the third quarter in line with expectations.

Trading at the professional services business remained stable after gains in transportation, Asia and the Middle East were offset by a deterioration in work and prices in Australia.

Balfour said it had disposed of 75% of its interest in the Carlisle Northern Development Route and 65% in A30/A35 road to Equitix for £47.5m.

It forecast its net debt at the end of the year would stand at £350m or £200m after taking account of proceeds from the sale of Balfour Beatty Workplace.