Commercial Outlook Q3 2023

The base rate was held in September, GDP is growing slowly, the construction materials price index is decreasing, and Propertymark Commercial agent sentiment is increasing in several key areas. However, economic uncertainty remains and improvements in sentiment are generally from a low base.

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This report is based on a survey of Propertymark commercial agents conducted during the third quarter of 2023. It is further addended with an analysis conducted by Propertymark of key statistics relevant to the commercial property market.

Economic outlook

The UK continues to face a cost-of-living crisis and the ongoing economic uncertainty is causing households and businesses to reduce consumption and investment. In addition, diverse factors including the ongoing trend for home working, legislative drivers (including net zero), stubbornly high materials prices, the availability of construction labour, continued supply chain bottlenecks and even weather patterns (floods), are among those impacting the Commercial Property Sector at large.

GDP growing slowly

GDP continues its slow upward trend. Long-term forecasts vary, but the IMF predict 1% real GDP growth in the UK in 2024 against 1.5% for the Euro Area.

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