Commercial building in Britain eased to a five-month low in June after a fifth UK interest rate rise in less than a year but still expanded

Commercial building in Britain eased to a five-month low in June after a fifth UK interest rate rise in less than a year but still expanded at a healthy clip, data showed yesterday.

The report from property services firm Savills plc showed that construction activity growth lost momentum in June but was still supported by private sector projects.

The company said that its Total Commercial Activity index slipped to 56.2 in June from 61.0 in May - well above the 50 mark denoting no growth.

‘With the base rate slipping up to 5.75 per cent this month, it is no surprise that developers have finally started to voice concerns about the cost of money,’ said Mat Oakley, head of Savills’s commercial research department.

Savills said that in London, commercial development showed the fastest monthly rate of growth since October 2006.

But the pace of expansion in other parts of south-east England slowed markedly, and public sector office construction declined for the first time since January.

The monthly survey was conducted for Savills by NTC Research, which also produces widely tracked Purchasing Managers’ Indexes on Europe’s manufacturing and service sectors.

Data last week from the Chartered Institute for Purchasing and Supply showed that UK construction growth accelerated to a 3 1/2-year high in June.

Source: The Business Times, 12 July 2007