Optimism among tradesmen and construction workers is higher now than at any other time since March 2008, new research has shown.

The Master Builders National Survey of Building and Construction revealed the sector is rebounding due to renewed confidence spurred on by increased residential activity.

Peter Jones, chief economist at Master Builders Australia, said the results are what is needed to "underpin a sustained recovery" and maintain stronger performances across the board.

"We are seeing key indicators continue to strengthen, while others have entered positive territory for the first time in years," he stated.

"For the first time in nearly three years, the proportion of builders reporting higher sales jumped above 20 per cent and builders reported improved profitability of their own businesses crept into positive territory."

Building firms may want to take the time to review their current construction insurance policy to ensure they are comprehensively covered across a range of circumstances now that project opportunities could be on the rise. The residential building sector is particularly busy, according to Mr Jones, with low interest rates though to be a primary driver.

Commercial construction is also on the rebound, with the sector enjoying its best performance in the survey since March 2011. 

State by state, Mr Jones noted that New South Wales remains the stand-out performer based on new dwelling starts in 2013.

"Victoria regained some of its previous strength and Western Australia continues to perform strongly notwithstanding the fading of intense resource investment that looms over the next few years," he stated.

Despite the positive survey results, Mr Jones urged the federal government to prioritise strategic roadmaps that provide stronger and sustained business confidence. The building recovery remains fragile and it is vital the upcoming Federal Budget aims to address this issue, the chief executive added.