Commercial Activity Contracts in All Nine Monitored Sectors
Commercial activity in August decreased at the fastest pace since December 2011, according to a research by Savills Building & Project Consultancy.
The Total Commercial Development Activity Index, a net balance monitoring the overall performance of the UK
commercial property sector posted -14.8% in August, a deterioration from -3.0% noted in July.
Michael Pillow, Head of Building Consultancy at Savills said: “With all sectors of the commercial development sector showing a downturn in August it is clear that the Olympic feelgood factor did not spread into the development business. We expect to see a recovery in development activity in Q3 and early Q4.”
The deterioration in public sector activity was the worst in eight months as the net balance in the latest month registered -24.1%. The net balance in private sector activity was -8.9% down from +1.6% in July.
Commercial developers signalled pessimism for the third month running. However, the net balance in August (-1.0%) improved from that seen in July (-5.2%). Anecdotal evidence suggested that pessimism was signalled as banks remained reluctant to lend.
Commercial activity decreased for the fourth month running and at the fastest rate in the sequence of decline. Public and private work both fell with the quickest decline noted in the public sector.
Commercial development activity fell at all nine monitored sectors. The fastest fall was in public sector office activity, followed by public new build. The slowest reduction was for refurbishment activity, which
decreased only modestly.