According to Savills’ Commercial Development Activity PMI report, conducted by NTC Research, the total commercial activity index rose to 61.2 in February, from 51.4 in January. Around five times as many panel members (27.9%) reported an increase in activity as those that signalled a decline.

This is supported by raising levels of public (18%) and private sector (34%) development in February, with rates of growth above their respective long run averages. Mat Oakley, head of Savills’ commercial research department, told PIN: “We started the survey when the market was very quiet in 2003. If we started it in a boom time, the reflection of the period would be more serious.”

February data reveals that eight of the nine areas of commercial property covered by the survey increased in activity. The sharpest rates of growth were in private sector new build and refurbishment activity from January’s figure of 58.2 to February’s figure of 63.8.

“Private sector office development continues to be a major driver of the development market, and this looks likely to continue over the short term”, said Oakley.

In addition, higher levels of commercial development were broad-based across all three geographical areas monitored by the survey in February. Out of London, the rest of the south east and the rest of the UK, the latter was the most prominent. In January ’07, its index was 56.5 and it has risen to February’s figure of 66.8. Panellists also indicated that commercial development growth in London and the South East eased from the previous month.
Oakley told PIN: “A ripple effect has occurred. London and the south east have been stronger for a while, so the rest of the UK is now catching up.”