Public sector commercial development activity last month reached its highest level since 2003, according to research by Savills.

Public sector new-build work reached 59.8 on the monthly index of commercial activity, its highest point for three years.

Overall, activity in commercial development rose at its sharpest rate for seven months, increasing to 61 last month, from 59.3 in September. About 30% of the panel of developers and contractors that provide data for the index reported increased activity in this sector.

However, Mat Oakley, head of commercial research at Savills, said private sector work remained the biggest driver of growth, especially the retail and leisure sector. Activity in this area grew from 52.6 in September to 54.9 in October; 18% of the panel reported increased activity.

Oakley said: “The index shows a continuation of the steady recovery we have seen since the summer. It’s back to the levels we saw at the start of the year.” In January total commercial activity measured 60 on the index.

London was the best performing region with the South-east also showing robust activity, with the index moving from 60.8 to 63.2. However, the rest of the UK reported a slight dip, with the index dropping to 61.2 from 62.5.