■ Furthermore, the latest fall was widespread across the nine monitored sectors. The quickest contraction was registered for public retail & leisure projects.

^{Source: Markit, Savills Research}

Future Expectations

■ UK commercial developers remained pessimistic towards the prospects for activity in the coming three months.

■ Moreover, the degree of negative sentiment worsened as indicated by the future expectations net balance falling from -4.5% in June to -6.6%, its lowest mark in over four-and-a-half years.

■ Panellists expect falls in activity in office and retail & leisure, which they blamed on the impact of the referendum’s outcome on client confidence.

^{Source: Markit, Savills Research}

Commercial Activity and UK Economy

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

■ The UK Construction PMI® registered 45.9 in July, down fractionally from 46.0 in June and below the 50.0 no-change threshold for the second month running.

■ This largely reflected the steepest fall in commercial building for over six-and-a-half years, alongside a drop in civil engineering activity for the first time in 2016. Residential construction also declined at a solid pace.

^{Source: Markit, Savills Research}

Total level of commercial activity

compared with one month ago

■ July saw UK commercial activity dip at the fastest pace since early-2009, as indicated by the net balance recording -18.0%.

■ Both public and private commercial work decreased at sharp rates, with the respective net balances registering -27.9% and -13.1%.

Office activity

compared with one month ago

■ A net balance of -27.8% of UK commercial developers signalled falling levels of public office projects during July. This was the lowest reading in almost four years.

■ Private office work contracted at the quickest pace since October 2011, as indicated by the net balance dipping to -18.1%.

Retail & leisure activity

compared with one month ago

■ July data highlighted the quickest drop in public retail & leisure activity for almost five years. The net balance declined from -17.6% to -32.0%.

■ The net balance for private retail & leisure work fell to an 89-month low of -22.9%, thereby pointing to a sharp rate of contraction.

New build activity

compared with one month ago

■ Commercial developers across the UK signalled declines in both private and public new build activity during July.

■ The respective net balances recorded -12.4% (55-month low) and -19.7% (47-month low), both consistent with sharp rates of contraction.

Industrial/warehouse activity

compared with one month ago

■ Industrial/warehouse projects in the UK decreased for the first time in nearly four years during July.

■ Falling from +4.3% in June to -8.3%, the net balance was at its lowest mark since June 2012.

Refurbishment activity

compared with one month ago

■ Having stagnated in June, refurbishment projects in the UK decreased during July.

■ The net balance was at a seven-and-a-half year low of -10.7%. Moreover, the latest contraction was the first since August 2012.

Office fit-out activity

compared with one month ago

■ Office fit-out activity fell again in July, thereby stretching the current sequence of contraction to three months.

■ Furthermore, the rate of reduction accelerated to the quickest since June 2012, as highlighted by the respective net balance sliding to -16.2%.

Summary of activity in July

■ July data pointed to a second straight monthly drop in UK commercial activity, with the pace of contraction the quickest in almost seven-and-a-half years.

■ Both public and private commercial projects fell at sharp rates, as indicated by the net balances recording -27.9% and -13.1% respectively.

■ Declines were seen across the nine types of activity monitored, with the downturn led by public retail & leisure work.

■ July’s widespread drop in activity was the first since August 2012.

Regional commercial activity

compared with one month ago

■ The downturn in commercial activity was broad-based by region in July, with declines seen in London, the South East and the ‘Rest of UK’.

■ London recorded the quickest fall in commercial work since early-2009, with the net balance dropping to -20.9%.

■ A similar trend was noted in the South East, where the net balance of -20.0% was the lowest registered in seven-and-a-half years.

■ The ‘Rest of UK’ saw a relatively modest contraction in activity, as indicated by the net balance of -11.0%.