Activity slumps in August – Savills
More today on the decline in activity among commercial property developers, this time from Savills, whose latest data on the subject shows August saw the steepest fall in development activity for 14 months. As well as the cutbacks among public-sector projects, there was also a drop in private-sector activity during the summer, with developers citing worries about the economy and difficulties in obtaining finance as well as their concerns about the outlook for the property market.
Almost 28% of the developers surveyed by Savills reported a fall in activity compared with 15% reporting a rise. The Savills Total Commercial Development Activity Index came in at minus 13.3% for August, after a positive reading of 0.6% in July. The average figure for the year so far is +0.7%.
Expectations have also been sharply lowered – the expectations component of the index, which charts forecasts for the next three months, was much weaker at minus 13.2% in August compared with the July reading of minus 1.2%. Companies surveyed were gloomy about all three main market sectors, but particularly about the development of office space, which saw a sharp contraction in activity in both the public and private spheres during August. In fact, of the nine sectors that Savills monitors, only refurbishment showed an increase in activity – this area has been expanding for 13 months now.
