■  Five of the nine tracked categories saw growth, the exceptions being public office, public retail, public new build and office fit-out. Private new build registered the quickest rise, although its rate of expansion slowed to a 32-month low.

^{Source: Markit, Savills Research}

Future Expectations

■  Despite remaining positive, confidence at UK commercial developers waned in January. Posting its joint-lowest reading since April 2013, the net balance for future expectations was at +9.5%.

■  Where commercial activity is anticipated to increase in the coming three months, developers reported higher enquiries from potential clients.

■  Anecdotal evidence indicated that worries towards a lack of new planning consents and the possibility of a rate hike weighed on sentiment.

^{Source: Markit, Savills Research}

Commercial Activity and UK Economy

■  The chart to the right shows the Savills Total Activity Index against the UK Construction PMI®.

■  January data pointed to a renewed slowdown in output growth across the UK construction sector, with the headline PMI signalling the weakest rate of expansion since April 2015.

■  Commercial work remained the best performing category in January, whereas civil engineering was again the weakest performing area of activity overall.

^{Source: Markit, Savills Research}

Total level of commercial activity compared with one month ago

■  Growth of UK commercial activity accelerated in January, after easing to a 35-month low at the end of 2015.

■  The downturn in public projects eased, with the net balance rising from -9.2% to -5.9%. Concurrently, private work expanded at the quickest pace since last October.

Office activity compared with one month ago

■  Public office activity fell for the second month running in January, albeit at a weaker rate. The net balance rose from -8.2% in December to -4.8%.

■  Growth of private office projects gathered pace, as signalled by the respective net balance climbing from +2.0% to +7.5% in January.

Retail & leisure activity compared with one month ago

■  January saw a back-to-back decline in public retail & leisure activity. That said, the rate of contraction eased since December.

■  Private retail & leisure projects continued to increase, but the rate of expansion slowed to a five-month low as indicated by the net balance dipping to +6.9%.

New build activity compared with one month ago

■  Public new build projects decreased for the eighth straight month in January. Rising from -12.7% in December to -5.5%, the net balance pointed to a slower pace of contraction that was modest overall.

■  Private new build activity continued to increase, although the rate of growth eased to a 32-month low.

Industrial/warehouse activity compared with one month ago

■  Industrial/warehouse activity increased for the forty-first consecutive month in January. However, the rate of expansion eased.

■  This was indicated by the net balance dropping from +12.2% in December to +7.5% (lowest since December 2012).

Refurbishment activity compared with one month ago

■  UK commercial developers signalled further growth of refurbishment work in January, stretching the current sequence of expansion to 41 months.

■  Nonetheless, the pace of increase softened, as indicated by the respective index recording a five-month low of +8.2%.

Office fit-out activity compared with one month ago

■  For the first time in over three years, office fit-out projects contracted in January. The respective net balance fell from +6.8% in December to -2.5%.

■  That said, the latest reading was consistent with a marginal rate of decline overall.

Summary of activity in January

■  A rebound in growth of private activity combined with a softer downturn in public projects led to stronger growth of total commercial work in the UK during January.

■  Growth was seen in five of the nine monitored categories, led by private new build. This was despite its rate of expansion easing to the slowest in 32 months.

■  Declines were seen for public office, public retail & leisure, public new build and office fit-out.

■  The only type of commercial work to record a faster rate of increase was private office.

Regional commercial activity compared with one month ago

■  All three monitored UK regions recorded higher levels of commercial activity in January.

■  Growth rates eased markedly in London and the South East, whereas an acceleration was noted in the ‘Rest of UK’.

■  The respective net balances posted +3.8% (nine-month low), +12.1% (nine-month low) and +9.5% (two-month high).

■  In all regions, rates of expansions were below their respective three-month averages.