■ Growth was recorded in six of the nine sectors in September. The fastest increase was noted for private new build work, followed by private retail & leisure projects.

^{Source: Markit, Savills Research}

Future Expectations

■ Commercial developers across the UK were upbeat regarding the three-month outlook for activity. The net balance posted +6.5% in September and was the highest since May.

■ Where positive sentiment was signalled, there were mentions of increased market confidence.

■ Panellists foresee increases in office projects, retail & leisure work, and industrial/warehouse activity.

^{Source: Markit, Savills Research}

Commercial Activity and UK Economy

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

■ At 52.3 in September, the PMI^® registered above the 50.0 no-change threshold for the first time since May.

■ Although the PMI signalled the strongest rate of growth since March, the average reading over the quarter as a whole (49.1) was the worst since early 2013.

■ Sub-sector data pointed to growth in housing activity and civil engineering, while work on commercial building projects fell at a slower pace.

^{Source: Markit, Savills Research}

Total level of commercial activity

compared with one month ago

■ Commercial development activity in the UK rose for the first time in four months, as indicated by a net balance of +12.1%. The rate of growth was the strongest in just under a year.

■ The increase was driven by a solid rise of private projects, while the downturn in public work slowed further.

Office activity

compared with one month ago

■ Private office activity rose for the first time in six months during September, with the net balance rising from -6.3% to +5.3%. The rate of growth was the strongest since February.

■ Public office projects fell again, although the pace of decline slowed further. This was highlighted by the net balance rising from August’s -17.2% to -14.0%.

Retail & leisure activity

compared with one month ago

■ Latest survey results pointed to an increase in private retail & leisure work, thereby ending a three-month period of decline. The pace of expansion was the fastest in seven months.

■ Meanwhile, the rate of contraction in public retail & leisure projects softened further. The net balance rose from -23.6% to -9.4%.

New build activity

compared with one month ago

■ UK commercial developers saw a second monthly increase in private new build work during September. The rate of expansion accelerated as indicated by the net balance rising from +5.0% to +14.8%.

■ Conversely, public new build projects declined again. The rate of contraction eased since August, however.

Industrial/warehouse activity

compared with one month ago

■ September data pointed to the first expansion in industrial/warehouse activity for three months.

■ At +10.9%, up from -12.8% in August, the net balance indicated a modest increase in industrial/warehouse activity.

Refurbishment activity

compared with one month ago

■ UK commercial developers signalled higher levels of refurbishment projects for the first time in four months in September.

■ The rate of growth was moderate, however, as highlighted by the respective net balance posting +9.2% (up from -3.6% in August).

Office fit-out activity

compared with one month ago

■ Office fit-out projects across the UK commercial property sector rose during September, thereby ending a four-month sequence of decline.

■ Moreover, the rate of expansion accelerated and was the most marked since last October. The net balance stood at +8.5%.

Summary of activity in September

■ Commercial activity across the UK rose for the first time in four months at the end of the third quarter.

■ The net balance rose from August’s -3.5% to an 11-month high of +12.1% in September. This was supported by a slower drop in public work as well as a solid increase in private activity.

■ Growth was reported in six of the nine types of activity monitored.

■ The sharpest increase was noted for private new build, followed by private retail & leisure.

Regional commercial activity

compared with one month ago

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

■ The ‘Rest of UK’ recorded the strongest rate of growth, with the net balance rising from +3.4% in August to +21.1%.

■ London saw the first rise in commercial activity for five months, as indicated by the net balance increasing from -12.5% to +2.2%.

■ The South East also registered a rebound, with September’s net balance of +19.3% the highest this year so far.