Engineering and construction firms are driving up demand in Edmonton's suburban office market, according to a new national office trends report.

Real estate services firm Cushman & Wakefield said the third quarter saw positive absorption in Edmonton's suburbs of 120,000 square feet.

Suburban office vacancy fell to 15.3 per cent from 16.6 per cent in the previous quarter.

The report forecasts demand for suburban office space will continue to grow over coming quarters as large oilsands projects require additional specialized services.

"With a strong oil and construction industry, our suburban market to the north has experienced positive absorption in Q3," said Shane Asbell, head of Cushman & Wakefield's Edmonton office, in a release.

"The increase in activity within this sector has also created opportunities for ancillary businesses such as law firms, accountants, environmental consultants and other professional services, helping create even further positive absorption in the suburbs."

In Edmonton's downtown office market, demand from municipal, provincial and federal governments has been very weak for the last few years, the report said. But the city has recently been more active.

The downtown market is also continuing to brace for the effect in the first quarter of 2012 of the 625,000-square-foot Epcor Tower opening.

Cushman & Wakefield says the new building will ultimately increase available space by more than 500,000 square feet, but the tower's impact has long been factored into leasing deals.

Downtown vacancy is now 7.2 per cent, down from 7.5 per cent in the previous quarter, said the report.