Leisure sector pushes activity to record level

A sharp rise in commercial building activity has been picked up in the latest UK survey from Savills. The property agent found that October saw the fastest acceleration in the rate of growth for seven months. The rate was well above the survey’s average.

The building boom was driven by a sharp extension of private sector activity but also an increased in public sector developments.

Mat Oakley, head of Savills' Commercial Research department, said: “Most notable this month was the sharp expansion in public sector new build activity, to its highest level, since we started this survey. Of the three main sectors that we cover it would appear that public sector leisure development has contributed most significantly to this pick-up. Private sector office development activity remains strong, particularly in London and the Southeast.”

Savills’ Total Commercial Activity Index posted 61.0 in October, up from 59.3 in September. The monthly report, PMI Commercial Development Activity, said the reading “indicated the sharpest rise in commercial development since March, with around 30% of the survey panel recording an expansion of activity in October".

The commercial developers surveyed said London remained the best performing UK region in October. The rate of expansion increased slightly since September and registered an all-time survey high. Around 39% of panel members recorded a rise in London commercial development activity, compared to just 5% that signalled a decline.

Although the private sector was found to be the main driver of growth, panel members reported a further expansion of work on public sector projects in October, with the rate of growth broadly in line with the average for 2006 to date. Savills found this growth was supported by the sharpest expansion of public sector new build activity since data were first collected in March 2003.