Two steps forward and one step back!

However, the overall buoyancy is being undermined by increasing levels of red tape and the activities of "cowboy" builders profiting from the Government's inaction over the issue of VAT.

Despite the growing order books, for many builders it is a case of two steps forward and one step back, says the Federation.

The 11 per cent rise in orders for the North West compares with an average of 27 per cent for England and Wales. The repair and refurbishment for private and social housing and public sector buildings lead the growth in work.

Building work in the commercial and industrial sector is also improving. Building new private homes continues to show a positive growth whereas new social housing continues to decline.

The survey also shows that 28 per cent of builders in the region, despite the seasonal fluctuations in construction activity during the winter months, expect workloads to improve.

Employment levels are up by 11 per cent and many builders are reporting difficulties in recruiting bricklayers, carpenters, plasterers and labourers.

Despite the current positive order book, growing levels of red tape are causing problems for many building firms, says the Federation.

In addition to national and European workplace legislation, the industry has its own specific bureaucrat headache: the Construction Industry Scheme (CIS).

The Federation says this new tax system for sub-contractors has proved to be extremely time consuming and, in practical terms, is unworkable.

Also, says the Federation, the increased demand for building work is increasing the activities of "cowboy" builders.

By working on a cash-in-hand, no-questions-asked basis, rogue traders are able to undercut VAT-registered builders.

These concerns have been put forward by the Federation to the Government which has responded and established working parties to examine how business bureaucracy can be reduced and how the CIS initiative can be improved.