diff --git a/ChangeLog.md b/ChangeLog.md
index 0c90f8395e..9bfe73bd94 100644
--- a/ChangeLog.md
+++ b/ChangeLog.md
@@ -17,6 +17,9 @@ Other enhancements:
 
 Bug fixes:
 
+* Show absolute paths in error messages in multi-package builds
+  [#1348](https://github.com/commercialhaskell/stack/issues/1348)
+
 ## 0.1.8.0
 
 Major changes:
diff --git a/src/Stack/Build/Execute.hs b/src/Stack/Build/Execute.hs
index 786a627885..551fa6e39b 100644
--- a/src/Stack/Build/Execute.hs
+++ b/src/Stack/Build/Execute.hs
@@ -821,19 +821,22 @@ withSingleContext runInBase ActionContext {..} ExecuteEnv {..} task@Task {..} md
                     case ec of
                         ExitSuccess -> return ()
                         _ -> do
-                            bs <- liftIO $
+                            bss <-
                                 case mlogFile of
-                                    Nothing -> return ""
+                                    Nothing -> return []
                                     Just (logFile, h) -> do
-                                        hClose h
-                                        S.readFile $ toFilePath logFile
+                                        liftIO $ hClose h
+                                        runResourceT
+                                            $ CB.sourceFile (toFilePath logFile)
+                                            $$ mungeBuildOutput stripTHLoading makeAbsolute pkgDir
+                                            =$ CL.consume
                             throwM $ CabalExitedUnsuccessfully
                                 ec
                                 taskProvides
                                 exeName
                                 fullArgs
                                 (fmap fst mlogFile)
-                                bs
+                                bss
                   where
                     cp0 = proc (toFilePath exeName) fullArgs
                     cp = cp0
@@ -1018,14 +1021,14 @@ singleBuild runInBase ac@ActionContext {..} ee@ExecuteEnv {..} task@Task {..} in
         bindir = toFilePath $ bcoSnapInstallRoot eeBaseConfigOpts </> bindirSuffix
 
     realConfigAndBuild cache allDepsMap = withSingleContext runInBase ac ee task (Just allDepsMap) Nothing
-        $ \package cabalfp pkgDir cabal announce console _mlogFile -> do
+        $ \package cabalfp pkgDir cabal announce _console _mlogFile -> do
             _neededConfig <- ensureConfig cache pkgDir ee (announce ("configure" <> annSuffix)) cabal cabalfp
 
             if boptsOnlyConfigure eeBuildOpts
                 then return Nothing
-                else liftM Just $ realBuild cache package pkgDir cabal announce console
+                else liftM Just $ realBuild cache package pkgDir cabal announce
 
-    realBuild cache package pkgDir cabal announce console = do
+    realBuild cache package pkgDir cabal announce = do
         wc <- getWhichCompiler
 
         markExeNotInstalled (taskLocation task) taskProvides
@@ -1039,7 +1042,7 @@ singleBuild runInBase ac@ActionContext {..} ee@ExecuteEnv {..} task@Task {..} in
         config <- asks getConfig
         extraOpts <- extraBuildOptions eeBuildOpts
         preBuildTime <- modTime <$> liftIO getCurrentTime
-        cabal (console && configHideTHLoading config) $ ("build" :) $ (++ extraOpts) $
+        cabal (configHideTHLoading config) $ ("build" :) $ (++ extraOpts) $
             case (taskType, taskAllInOne, isFinalBuild) of
                 (_, True, True) -> fail "Invariant violated: cannot have an all-in-one build that also has a final build step."
                 (TTLocal lp, False, False) -> primaryComponentOptions lp
@@ -1280,21 +1283,32 @@ singleBench runInBase beopts benchesToRun ac ee task installedMap = do
           announce "benchmarks"
           cabal False ("bench" : args)
 
--- | Grab all output from the given @Handle@ and print it to stdout, stripping
--- Template Haskell "Loading package" lines. Does work in a separate thread.
+-- | Grab all output from the given @Handle@ and log it, stripping
+-- Template Haskell "Loading package" lines and making paths absolute.
+-- thread.
 printBuildOutput :: (MonadIO m, MonadBaseControl IO m, MonadLogger m)
                  => Bool -- ^ exclude TH loading?
                  -> Bool -- ^ convert paths to absolute?
                  -> Path Abs Dir -- ^ package's root directory
                  -> LogLevel
-                 -> Handle -> m ()
+                 -> Handle
+                 -> m ()
 printBuildOutput excludeTHLoading makeAbsolute pkgDir level outH = void $
     CB.sourceHandle outH
-    $$ CB.lines
+    $$ mungeBuildOutput excludeTHLoading makeAbsolute pkgDir
+    =$ CL.mapM_ (monadLoggerLog $(TH.location >>= liftLoc) "" level)
+
+-- | Strip Template Haskell "Loading package" lines and making paths absolute.
+mungeBuildOutput :: MonadIO m
+                 => Bool -- ^ exclude TH loading?
+                 -> Bool -- ^ convert paths to absolute?
+                 -> Path Abs Dir -- ^ package's root directory
+                 -> ConduitM ByteString ByteString m ()
+mungeBuildOutput excludeTHLoading makeAbsolute pkgDir = void $
+    CB.lines
     =$ CL.map stripCarriageReturn
     =$ CL.filter (not . isTHLoading)
     =$ CL.mapM toAbsolutePath
-    =$ CL.mapM_ (monadLoggerLog $(TH.location >>= liftLoc) "" level)
   where
     -- | Is this line a Template Haskell "Loading package" line
     -- ByteString
diff --git a/src/Stack/Types/Build.hs b/src/Stack/Types/Build.hs
index 0bb9537603..0c048a51da 100644
--- a/src/Stack/Types/Build.hs
+++ b/src/Stack/Types/Build.hs
@@ -108,7 +108,7 @@ data StackBuildException
         (Path Abs File)  -- cabal Executable
         [String]         -- cabal arguments
         (Maybe (Path Abs File)) -- logfiles location
-        S.ByteString     -- log contents
+        [S.ByteString]     -- log contents
   | ExecutionFailure [SomeException]
   | LocalPackageDoesn'tMatchTarget
         PackageName
@@ -238,7 +238,7 @@ instance Show StackBuildException where
                     Map.singleton name version
                 go _ = Map.empty
      -- Supressing duplicate output
-    show (CabalExitedUnsuccessfully exitCode taskProvides' execName fullArgs logFiles bs) =
+    show (CabalExitedUnsuccessfully exitCode taskProvides' execName fullArgs logFiles bss) =
         let fullCmd = unwords
                     $ dropQuotes (toFilePath execName)
                     : map (T.unpack . showProcessArgDebug) fullArgs
@@ -250,14 +250,12 @@ instance Show StackBuildException where
                 then " (THIS MAY INDICATE OUT OF MEMORY)"
                 else "") ++
            logLocations ++
-           (if S.null bs
+           (if null bss
                 then ""
-                else "\n\n" ++ doubleIndent (T.unpack $ decodeUtf8With lenientDecode bs))
+                else "\n\n" ++ doubleIndent (map (T.unpack . decodeUtf8With lenientDecode) bss))
          where
-          -- appendLines = foldr (\pName-> (++) ("\n" ++ show pName)) ""
-          indent = dropWhileEnd isSpace . unlines . fmap (\line -> "  " ++ line) . lines
+          doubleIndent = dropWhileEnd isSpace . unlines . fmap (\line -> "    " ++ line)
           dropQuotes = filter ('\"' /=)
-          doubleIndent = indent . indent
     show (ExecutionFailure es) = intercalate "\n\n" $ map show es
     show (LocalPackageDoesn'tMatchTarget name localV requestedV) = concat
         [ "Version for local package "