Chairman John Morgan said demand from City banks and institutions to upgrade offices had seen a return of large fit-out projects in London.

In a group trading statement, he said: “The division’s short term outlook has improved with the forward orderbook increasing since the start of this year to a higher level compared with a year ago.”

Morgan said that construction had made a good start to the year although he was concerned about the timing and impact of future spending cuts.

But the recent recovery in construction workloads had helped the forward orderbook rise from £3.2bn at the start of the year to £3.6bn.

Civil engineering workloads slipped in the first part of the year largely due to the transition from AMP4 to AMP5 in the water sector and delays in the award of some major infrastructure projects.

He said: “The division is continuing to pursue a number of major infrastructure opportunities and its outlook remains positive.

“Having converted all of its preferred bidder opportunities, the division’s forward order book has also increased by around a quarter since the start of the year,” added Morgan.

He said that plans to merge the construction and civils operations would enhance the group’s ability to bid for and deliver larger and more complex contracts in future.