Private commercial work also grew, with surveyors who reported a rise in such work outnumbering those who reported a fall by 35%.
Building activity was notably strong in the South-east and the North, with Northern Ireland reporting growth for only the second time in the past three years.
Launce Morgan, construction faculty chairman at the RICS, said: "Many projects that had been shelved are coming back now that business confidence is returning."
The government also estimates that the private sector will spend more than £4bn on PFI contracts in 2004/05, falling to £2.8bn the following year.
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