■  As was the case in February, six of the nine monitored categories recorded growth in March, the exceptions being public office, public retail & leisure and public new build.

^{Source: Markit, Savills Research}

Future Expectations

■ Although commercial developers across the UK still expect activity to expand in the coming three months, the level of confidence waned in March.

■ The net balance dipped from +11.1% to a 40-month low of +2.3%.

■ Survey evidence suggested that sentiment was hampered by fears around the Brexit-vote outcome.

^{Source: Markit, Savills Research}

Commercial Activity and UK Economy

■ The chart to the right shows a three-month average of the Savills Total Activity Index against UK GDP data.

■ The net balance measured by the Savills survey averaged +9.4% in Q1, up marginally from +8.5% in the final quarter of 2015.

■ This indicates that in the opening quarter of 2016, the commercial property sector is likely to have contributed to GVA to a greater extent than in 2015 Q4.

^{Source: Markit, Savills Research}

Total level of commercial activity compared with one month ago

■ March data pointed to a forty-third successive monthly rise in UK commercial activity. This was indicated by the net balance recording +8.9%.

■ However, the rate of expansion eased since February, weighed on by both a sharper downturn in public work and weaker growth of private projects.

Office activity compared with one month ago

■ Public office projects declined for the fourth straight month in March, and at a quicker pace. The respective net balance dropped from -3.4% to a 40-month low of -8.7%.

■ Growth of private office work eased to the joint-slowest since May 2013. The net balance was down from +6.5% to +1.9%.

Retail & leisure activity compared with one month ago

■ Public retail & leisure work continued to fall in March, thereby extending the current sequence of contraction to four months. Although weaker than in February, the pace of contraction remained marked.

■ Private retail & leisure activity rose for the thirty-eighth successive month, but at a softer rate.

New build activity compared with one month ago

■ March data highlighted a forty-third consecutive monthly rise in private new build activity. Accelerating since February, the rate of growth was robust.

■ Conversely, public new build projects declined further, with the rate of reduction being the quickest in three months.

Industrial/warehouse activity compared with one month ago

■ The net balance for industrial/warehouse activity climbed to a four-month high of +17.0% in March.

■ This latest reading was consistent with a sharp rate of expansion that was the strongest among the nine tracked categories.

Refurbishment activity compared with one month ago

■ Refurbishment activity in the UK rose again in March, marking a 43-month sequence of expansion.

■ Furthermore, the rate of growth was solid and the strongest in 2016 so far. The net balance was at +10.2%.

Office fit-out activity compared with one month ago

■ Growth of office fit-out projects was sustained in March.

■ The net balance was unchanged from February’s +3.9%, which pointed to a slight pace of expansion overall.

Summary of activity in March

■ Growth of UK commercial activity softened in March, weighed on by a sharper downturn in public work and a softer increase in private projects.

■ As was the case in February, six of the nine monitored categories saw increases.

■ The exceptions were, again, public office, public retail & leisure and public new build.

■ Industrial/warehouse activity saw the strongest upturn for the second straight month. Growth in this category was the quickest since last November.

Regional commercial activity compared with one month ago

■ Commercial activity increased in all three monitored UK regions during March.

■ That said, rates of expansion eased and were below their respective three-month averages in all cases.

■ The strongest increase was noted in the ‘Rest of UK’ and the slowest in the South East.

■ The net balances for London, the South East and the ‘Rest of UK’ were at +6.8%, +4.6% and +12.1% respectively.