The latest Markit/CIPS UK Construction Purchasing Managers’ Index for May rose to 50.8 from 49.4 in April.
Any number above 50 represents a rise in the market and it is the first time buyers have breached that figure since October 2012.
Residential construction led the way with the sector rising at its fastest rate for two years.
David Noble, Chief Executive Officer at the Chartered Institute of Purchasing & Supply, said: “The construction sector seems to have turned a corner after six dismal months.
“The improvement has been fuelled by a boon in house building, but the sector remains bogged down by contractions in commercial construction and civil engineering.
“Whilst confidence for the year ahead remains high, the poor performance of suppliers and flat levels of employment will serve as a reality check to construction and the wider UK economy.
“The Government’s attempts to boost house building has given months of lacklustre growth a shot in the arm, but the continued decline in civil engineering can be largely attributed to the lack of public sector projects, which show no sign of increasing.
“This, coupled with poor performance in the commercial sector, means house building alone is driving industry growth.
“Supplier performance in May was the weakest since 2007, reflecting the slow pace of growth filtering through the supply chain, which continues to recover from the recession.
“This is typified by shortages of capacity, low stocks and worsening lead times which have reduced suppliers’ capacity to meet demand as the sector tries to gear up for recovery.
“This will need to improve, before the sector sees a return to previous levels of output.”
Tim Moore, Senior Economist at Markit and author of the Markit/CIPS Construction PMI, said: “UK construction output appears to have finally pulled out of a tailspin in May, but the latest figures suggest that the sector is worryingly reliant on residential building work for thrust.
“Construction firms cited improving house building activity as the key factor behind a rise in new orders for the first time since May 2012.
“Meanwhile, shrinking spending on both commercial and civil engineering projects acted as a drag on overall new business growth.
“While the latest survey provides some hope that rising construction output will support UK GDP in the second quarter, the sector remains unlikely to contribute positively to labour market conditions.
“May data indicated stagnant employment levels at construction firms, with survey respondents noting that cautious job hiring polices persisted across the sector in spite of a slight improvement in output volumes.”
