Contractors are starting to suffer heavy cost pressure as the industry clocked up its fourth consecutive quarter of growth for the first time in six years.
According to the latest all-industry trade survey construction firms of all sizes across the industry are now reporting strong new-build activity and high expectations for the year ahead.
The first three months of the year also recorded the first significant jump in firms reporting tender price rises.
But these are being forced up by intensifying labour and materials price pressure, rather than strong margin growth.
While private housing remained the key driver in Q1, there was reported growth in commercial work and, for the first time, public school and healthcare work.
