The IHS Markit/CIPS UK Construction Purchasing Managers’ Index rose to 55.8 in July from 53.1 in June signalling the fastest rise in overall construction output since May 2017.
House building led the charge with the latest upturn the strongest since December 2015.
Commercial work also picked-up at the fastest pace for two-and-a-half years with civil engineering also showing a moderate increase.
But despite an upturn in tender opportunities, construction companies are cautious about the year ahead business outlook.
The degree of positive sentiment about future workloads was unchanged since June and remained weaker than the long-term survey average.
Tim Moore, Associate Director at IHS Markit and author of the report said: “July data reveals an impressive turnaround in the performance of the UK construction sector, with output growth the strongest for just over one year.
“While the recent rebound in construction work has been flattered by its recovery from a low base earlier in 2018, there are also signs that underlying demand conditions have picked up this summer.”
Duncan Brock, Group Director at the Chartered Institute of Procurement & Supply, said: “Favourable circumstances lay the foundations for success with an easing in cost pressures to a three-month low and a rekindled enthusiasm from clients to place orders held back by uncertainty.
“Residential and commercial building took the overall lead with the most robust performances since December 2015 and even civil engineering put on a slightly better show