■  Dragging the growth rate down was a softer expansion in private projects. Whereas public work continued to contract, the latest reduction was the weakest in the current four-month sequence of declines.

■  Eight of the nine tracked categories registered growth, led by industrial/warehouse. Public new build activity fell further, the sixth consecutive month in which this has been the case.

^{Source: Markit, Savills Research}

Future Expectations

■  Confidence among UK commercial developers improved slightly from October’s two-and-a-half year low.

■  Rising from +9.5% to +10.4% in November, the net balance was consistent with a robust degree of optimism regarding the three-month outlook for activity.

■  Positive sentiment was linked to better economic conditions across the UK. However, there were concerns about a slowdown in fee requests.

^{Source: Markit, Savills Research}

Commercial Activity and UK Economy

■  The chart to the below shows the Savills Total Activity Index against the UK Construction PMI_®.

■  Weaker increases in activity were seen in both the Savills and the Construction PMI surveys during November.

■  PMI data indicated that all three broad areas of construction activity – residential, civil engineering and commercial – experienced a slowdown in growth.

^{Source: Markit, Savills Research}

Total level of commercial activity compared with one month ago

■  Commercial activity in the UK rose further in November, marking a 39-month sequence of growth. Despite easing since October, the rate of expansion was still solid.

■  While public projects continued to fall, private work increased again. The respective net balances were at -2.7% and +15.4% (three-month low).

Office activity compared with one month ago

■  November data pointed to a rebound in public office work, which rose for the first time since July. The net balance increased from -7.6% in October to +2.9%.

■  Private office activity also expanded, as a net balance of +8.0% of commercial developers signalled growth. This compares with a reading of +4.0% in October.

Retail & leisure activity compared with one month ago

■  UK commercial developers indicated that both private and public retail & leisure projects increased markedly during November.

■  The net balance for public retail & leisure was at a five-month high of +9.4%, while the respective reading for private retail & leisure fell from +14.4% to +9.8%.

New build activity compared with one month ago

■  Growth of private new build activity accelerated in November, as indicated by the net balance rising from +13.1% to a five-month high of +15.2%.

■  Meanwhile, public new build projects decreased for the sixth consecutive month, although at the weakest pace since July.

Industrial/warehouse activity compared with one month ago

■  Industrial/warehouse activity increased further in November, and at a sharp rate that was quicker than in the prior month.

■  A net balance of +20.6% of commercial developers reported growth, compared with +16.8% in October.

Refurbishment activity compared with one month ago

■  November data highlighted a thirty-ninth successive monthly rise in refurbishment activity across the UK.

■  Having accelerated since October to the fastest since July, the rate of growth was sharp.

Office fit-out activity compared with one month ago

■  Office fit-out activity in the UK commercial property sector increased further in November, but at a weaker pace.

■  The net balance was down from +14.7% in October to +7.3%, a reading consistent with a solid rate of expansion.

Summary of activity in November

■  November saw growth of commercial work in the UK lose strength. Underpinning this was a softer increase in private work.

■  Whereas public projects fell further, the rate of reduction was the weakest in the current four-month sequence of contraction.

■  Growth was registered in eight of the nine monitored categories, with public new build the only exception.

■  For the sixth straight month, the strongest rate of expansion was seen in industrial/warehouse activity.

Regional commercial activity compared with one month ago

■  All three monitored UK regions recorded growth of commercial projects in November, led by the South East.

■  The South East saw the strongest increase in commercial work since June, as indicated by the net balance rising to +21.7%.

■  The slowest expansion was again registered in London. Despite falling to +13.3%, the net balance was in line with its three-month average (+13.4%).

■  The net balance for the ‘Rest of UK’ fell from +20.0% to +16.5%, a reading still consistent with a sharp rate of growth.