According to Savills’ latest Total Commercial Development Activity Index, there is a sharp decline in UK commercial development. It stands at -16.4% which is down 6% from February’s figure.

This is the lowest reading since data was first collected in March 2003, with around 28% of survey respondents reporting a fall in activity, against just 12% that signalled a rise.

In March, lower levels of activity were widely attributed to tighter bank lending conditions and deteriorating market sentiment. Some also commented that weaker growth prospects for the global economy had dented client demand. Compared to one month ago, work on public sector projects have fallen at the sharpest rate in the survey history. Private sector development declined markedly and at a faster pace than in February.

The Future Activity Index registered -19.6% in March, down from -7.7% in February to indicate that business sentiment was in negative territory for a sixth consecutive month. The latest reading was close to January’s survey low (-23.6%), with developers linking their pessimism to weak market demand and the rising cost of borrowing in March. Commercial developers reported negative sentiment about the 3-month outlook for office construction, retail and leisure activity and industrial/warehouse projects.