August figures from Savills show private sector work declining for the first time in five months
Commercial development activity fell at its sharpest rate for 11 months during August, according to Savills’ commercial development report.
The research found that public sector activity had declined at its fastest rate since March, while private sector development decreased for the first time in five months.
The findings were based on a monthly questionnaire to a panel made up of leading developers and contractors. Around 29 % of commercial developers recorded a fall in activity during August, while 17% reported an increase.
Public sector work was hardest hit, although the private sector didn’t escape losses. The refurbishment and private new build sectors saw marginal expansion, up 6.2% and 1.6% respectively.
Within London, activity was up by 11.7%, although the rest of the South-East saw a drop of 4.1%, and there was a 3.5% fall over the rest of the UK.
Savills believe the data for August indicate a negative three-month outlook for commercial development in the UK. However, the index tracking future expectations signalled only a marginal deterioration in confidence.
Of the survey’s respondents, 18% expected a fall in activity over the next three months, but 15% anticipated a rise.
Those making gloomier predictions cited economic fragility and concerns over the level of bank lending as the main reasons for pessimism.