Two thirds of construction firms in Yorkshire are more optimistic about their prospects than they were 12 months ago, according to a new report.
However, the survey of more than 600 companies by law firm Irwin Mitchell highlighted concerns about the cost of labour - with 61 per cent expecting wages to rise during the rest of 2014.
This is being caused partly by a skills shortage in the sector, the firm claims.
The survey also shows a growing number of main contractors who are seeing tender return prices increasing due to subcontractor inflation, following a long period of flat prices.
Partner Julie Morrissy said: “These results reflect an improving sector. Not only are we seeing the impact of strong demand for house building, the sector is being buoyed by mid to high end residential developments, offices, commercial space and logistics.
“The availability of materials is a concern, but with the majority of firms expecting wages to increase during the rest of the year, a lack of skilled workers could also hamper growth.”