Despite signs that the economy is slowing, occupiers of commercial property expect to expand their property portfolios on the back of continuing growth in output and employment over the next six months, says the CBI/GVA Grimley Corporate Real Estate Survey.

The twice-yearly survey, conducted between 24 October and 14 November, reveals 43 per cent of firms expect to expand their amount of property space in the next six months, while 22 per cent plan to reduce it. This balance of 21 per cent is just below the rate occupiers expanded their space over the last six months (a balance of 22 per cent).

However, firms in extraction and manufacturing sectors saw an overall contraction in property holdings over the last half year period and expect to continue reducing their property space in the next six months.

Banking, finance and insurance firms also expect to reduce their property slightly in the first half of this year (a balance of minus 2 per cent) but, if unconstrained, half of businesses in this sector would contract their space, while only around a quarter would expand it - giving a much larger negative balance of minus 23 per cent.

David Mace at GVA Grimley in Bristol, said: "The desire in the finance and manufacturing sectors to reduce property space can be attributed both to concerns about the impact from the credit squeeze over the next six months and the surplus space that these sectors traditionally carry.

"But this survey does not support the speculation about a crisis in commercial property. Firms are still expecting to expand their property occupation much as they have in recent months. A watchful eye should be kept on how the coming changes to empty rate relief affect occupier behaviour, however, as these are likely to have some negative consequences."

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