UK commercial property development activity weaker across the board in August – Savills
Savills reports that UK commercial property development activity fell in all nine monitored sectors in August. The firm also says the decline in activity was the fastest since December 2011. The construction PMI data for August had signalled only a slight decline in total construction activity, compared with the “solid contraction” recorded in Savills’ commercial property development activity index.
The level of total UK activity fell for the fourth month in a row, with the net balance for August index reading -14.8% compared with July’s -3.0%. Public-sector activity was the lowest for eight months, as the net balance for August came in at -24.1%, while the net balance for private-sector activity fell to -8.9% from the positive July reading of +1.6%.
Commercial property developers signalled pessimism in the future expectations index, with anecdotal evidence suggesting this was the result of banks’ continued reluctance to lend. But the net balance of future expectations improved to -1.0% from -5.2% in July.
Activity levels fell in London, for the first time in three months (net balance -14.3%), but the three-month average for the capital remains positive after readings of +15.5% in June and +6.9% in July. Activity also fell in the South East, where the net balance was -16.0% (after +4.0% in June and 0.0% July). The rest of the UK recorded an expansion in activity, with a net balance of +8.9% in August (after -7.8% in June, 0.0% in July).
