■  While six of the nine monitored categories recorded growth; public office, public retail & leisure and public new build all saw further declines.

^{Source: Markit, Savills Research}

Future Expectations

■  Sentiment among UK commercial developers improved during February.

■  A net balance of +11.1% of companies foresee further growth of commercial activity in the coming three months, compared with +9.5% in January.

■  Panellists reported improved client activity and greater fee requests as reasons boosting confidence.

■  However, there were a few mentions of fears around the Brexit vote outcome.

^{Source: Markit, Savills Research}

Commercial Activity and UK Economy

■  The chart to the right shows the Savills Future Activity Index against the PMI^® survey data measuring business expectations for the next 12 months in the UK construction sector.

■  Latest data indicated that UK constructors remained upbeat overall about the business outlook in February. However, the respective index was at 69.9, down from 70.4 in January and the lowest since December 2014.

■  Conversely, Savills panellists’ confidence regarding the prospects for commercial work in the coming three months improved during February.

^{Source: Markit, Savills Research}

Total level of commercial activity compared with one month ago

■  UK commercial activity rose for the 42nd successive month in February. Moreover, the rate of growth was solid and the fastest since October 2015.

■  The upturn was driven by private work, which rose at the most pronounced rate in four months. As has been the case since last August, public projects declined.

Office activity compared with one month ago

■  At -3.4%, the net balance for public office activity signalled a further decline in February, the third in as many months.

■  In contrast, private office projects continued to rise, marking a 42-month sequence of expansion. Nonetheless, the pace of growth eased since January.

Retail & leisure activity compared with one month ago

■  February data pointed to a third successive monthly decline in public retail & leisure work. Furthermore, the rate of reduction accelerated to the quickest since January 2013.

■  Conversely, private retail & leisure activity continued to rise. The net balance was at a four-month high of +13.6%.

New build activity compared with one month ago

■  Growth of private new build projects accelerated in February, with the respective net balance rising from +10.3% in January to +13.6%.

■  Public new build activity decreased for the ninth month in succession, but at the slowest rate since July 2015.

Industrial/warehouse activity compared with one month ago

■  Rising from +7.5% in January to +16.3% in February, the net balance for industrial/warehouse activity was consistent with a sharp pace of expansion.

■  In fact, the latest reading pointed to the strongest growth rate since November 2015.

Refurbishment activity compared with one month ago

■  Refurbishment activity in the UK rose further in February, thereby extending the current expansionary sequence to 42 months.

■  Having eased again, however, the rate of growth was the second-slowest since December 2012.

Office fit-out activity compared with one month ago

■  After falling in the previous month for the first time since September 2012, office fit-out projects increased during February.

■  Nevertheless, the net balance of +3.9% was indicative of a slight pace of expansion overall.

Summary of activity in February

■  A stronger increase in private work boosted growth of total commercial activity in February. Concurrently, the downturn in public projects was extended to seven months.

■  Six of the nine monitored categories saw increases, the exceptions being public office, public retail & leisure and public new build.

■  The sharpest expansion was seen for industrial/warehouse activity, where growth was at a three-month high.

■  Public retail & leisure projects declined at the most pronounced rate since January 2013.

Regional commercial activity compared with one month ago

■  Growth of commercial activity was sustained across the three monitored UK regions in February.

■  Rates of expansion accelerated in London and the ‘Rest of UK’, while a moderation was noted in the South East.

■  The respective net balances posted +14.3% (two-month high), +19.1% (four-month high) and +10.0% (10-month low).

■  Rates of growth in London and the ‘Rest of UK’ were above their respective three-month averages, while the opposite was seen in the South East.