The latest Markit/CIPS UK Construction PMI index rose to 57.3 from 57.1 in July.

More than half of the survey panel (53%) anticipate a rise in business activity over the next 12 months, while only 5% forecast a reduction.

David Noble, Group Chief Executive Officer at the Chartered Institute of Procurement & Supply, said: “The construction sector picked itself up a little more this month as overall activity stepped up.

“Housing remained the strongest driver of growth in addition some reported new impetus in the commercial  sector.

“Capacity restraints limited some companies in their determination to actively chase new business, using  their resources to fulfil current commitments.

“Some raw material shortages were still in evidence as suppliers were challenged to get their act together and keep pace.

“ Any further obstacles hampering strong progress were around the lack of available  skilled staff as subcontractors were still highly sought-after and offered higher wages.

“But,the rise in the level of permanent posts and employment generally rising for the last 32 months, confirmed an optimism displayed by more than half of the survey respondents.”

Markit senior economist Tim Moore said: “UK construction companies remained on a reasonably strong growth footing in August, helped by a sustained recovery in both residential and commercial building activity.

“Meanwhile, there was another loss of momentum for civil engineering, which brought output growth within this sub-sector further below the multi-year highs seen in 2014.

“The construction sector maintained its position as a strong engine of job creation in August, as permanent staff numbers and subcontractor demand both picked up over the month.

“However, the surge in construction workloads over the past two-and-a-half years has created substantial skill shortages across the sector, with survey respondents reporting ongoing staff recruitment difficulties this summer.

“There was some encouraging news in terms of construction materials availability, as firms reported the lowest pressure on delivery times for over three years, helped by rising inventories and a rebound in supplier capacity.”

Stefan Friedhoff, Global Corporates managing director for construction at Lloyds Bank Commercial Banking, said: “There is an increasingly positive feeling in the sector as firms continue to get a clearer handle on inflationary pressures, a tight labour market and growing demand. That sentiment is reflected in today’s data.

“Encouragingly, contractors are now far more selective in the way they bid for work, so although pipelines are healthy, firms are exercising restraint. In the long-term this should boost margins and, most importantly of all, ensure a more robust construction sector.

“The fundamentals in the industry are sound and this is fuelling a bullishness about potential output for the remainder of the year.”