Commercial property developers in the UK have put their faith behind the economy's ability to avoid the fated double dip recession, as the Savills Total Commercial Development Activity Index for March rises to its highest level since February 2010. According to the report the index rose to 13.1% in March, from a negative 3.6% in February, which was the first time the index had risen in nine months according to Savills. Savills said that a positive number indicates improvement in the index, while a negative on indicated deterioration, and the degree of change is in the number.
Thanks to the 0.1% growth in Q1, the UK narrowly avoided the double dip recession, as it did not see two consecutive quarterly declines according to a report by the National Institute of Economic and Social Research.
"Developers are becoming slightly more optimistic about the prospects for economic growth," Matt Oakley, head of commercial research, said by phone. "People are beginning to embrace the idea that a double-dip recession isn’t inevitable."
The Savills survey of 200 real estate developers, which was compiled by Markit Economics Ltd, found a general increase in confidence among developers. According to the report only 12% of developers reported a decline in output in March, while a quarter of developers reported an increase. Some 18% of respondents predicted economic expansion would lead to increased development in the next 3 months, while 10% predicted a decline.
"Encouragingly, this recovery appears to be broad-based and not just London-focused," Michael Pillow, head of building consulting at Savills, said in the report. "With development activity rising at its strongest rate for two years, it is clear that developers are anticipating a demand-side improvement."
- Tuesday 17 April 2012