The amount of commercial development in the UK has fallen to its lowest level in five years, according to a recent survey.

Development activity is now at its lowest ebb since March 2003, when Savills and NDC began the Commercial Development Activity Index.

Around 28% of developers report a decline in development activity, with 12% signalling a rise.

This means that the Index, a net figure for overall activity, showed -16.4%, down from -6% in February.

Developers attributed the drop to tighter bank lending conditions and deteriorating market sentiment, as well as weaker growth prospects for the global economy.

Worse to come

Moreover, the Future Activity Index – an indicator of business sentiment – was -19.6% in March, down from -7.7% in February. March is the sixth consecutive month that developers have signalled that they are gloomy about future prospects.

Mat Oakley, head of Savills’ commercial research department, said: ‘March’s survey showed no signs of Spring emerging in either developers’ confidence or activity levels. While further base cuts are looking inevitable, the key issue for developers will be when these cuts begin to be reflected in the LIBOR rate.’