Economic output shrank 0.25% in Q1 2012 following a 0.3% fall in Q4 2011. Persistently high overall inflation has meant a steep fall in incomes in real terms. Employment growth has been mildly encouraging over the last six months. The economic outlook will inevitably be weak in the short term. Occupier demand has remained subdued across most of the commercial property market. GVA forecasts for rental value growth are now down to 0.3% in 2012 and 0.6% in 2013. Commercial property transactions have averaged £7.6bn per quarter over the last year. Polarisation between prime and secondary property continues.

Economic trends -- commercial property market: recent occupier market trends; outlook for occupier market performance -- investment market commentary: recent investment performance; investment market outlook.