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Commercial sector slows to three-month low

Commercial projects saw a slowdown in April, as activity dipped in three of the nine major commercial sectors compared with March.

Activity in public office projects, public new build, and public retail and leisure saw a dip during April compared with the previous month, according to research from Savills.

While public commerical projects contracted, private commerical work continued to grow over the past month.

Compared with a month ago, activity in the commercial sector had a net balance of 13.1 per cent, down from 14.7 per cent in March.

This was driven by the overall contraction in public projects, which recorded a net balance of 1.5 per cent, while private projects saw an overall net balance of 21.7 per cent.

Private office projects saw their slowest level of growth since August 2014, despite recording growth fro the thirty-second consecutive month.

The contrast between public and private activity was also seen in the retail and leisure sector; the net balance for public activity in this sector dropped from 0.0 per cent in March to -3.8 per cent in April, the third time it has seen a decline in 2015.

In contrast, private retail and leisure activity increased for the 27th successive month, recording a net balance of 13.3 per cent in April, the highest reading since November 2014.

More positively, April data highlighted a third consecutive monthly increase in office fit-out projects across the UK.This sector recorded a net balance of 4.3 per cent, only slightly down compared to a reading of 5.1 per cent in March.

And refurbishment activity rose during April, with the net balance growing to 18.3 per cent, up from 16.8 per cent in March. This represents the 32nd consecutive month of growth.

Commenting on the survey, Savills head of building and project consultancy Simon Collett said: “The contraction of public sector activity, and in turn a slowdown in total activity growth, is typical the month before any general election.

“Based on past trends we expect an improvement in total activity levels in June or July, although this will be dependent on wider economic conditions.”

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