But it also warned that the market remained strained as main contractors work through legacy jobs that were bid before recovery took hold.

The firm’s cost-cutting programme and focus on better margin work saw turnover slip 17% to £97m.

This selective approach helped to lift underlying operating profits from £3m to £3.6m in the first six months of 2014, representing a margin of 3.7% (2013: 2.5%).

Chief executive officer Ian Lawson said: “Encouragingly, we are starting to see the expected growth in market activity as evidenced by the increase in the order book to £185m.

“While there remain signs of tightness and strain within the market, our improving operational processes are helping us to manage this more effectively and deliver improving margins.”

New contracts won in the period include London commercial office developments at Principal Place and Angel Court, and the Ordsall Chord link bridge project between Manchester Victoria and Piccadilly stations.

Lawson added that improved profitability had supported £3.2m in capital investment in the UK business and additional equity investment in its India business where production output had reached to record levels.