New research from the construction industry reveals that £1 billion spent on construction would create 32,000 jobs locally, Construction News reported.
The regional analysis, commissioned by the UK Contractors Group, is to be used to spearhead a nationwide campaign for investment in construction, particularly in the run-up to the Chancellor’s autumn statement.
The report came a week after the Prime Minister David Cameron promised to kick-start construction, saying the government would “unblock” funding and planning decisions that were holding up work.
Further details are due to be revealed in the Chancellor’s autumn statement on 29 November.
The UKCG’s submission to the Chancellor ahead of the autumn statement emphasises the industry’s “multiplier effect” and the fact that construction investment retains jobs locally, UKCG director Stephen Ratcliffe said.
It builds on work by strategy firm LEK Consulting two years ago, which showed that for every £1 of spent on construction, the wider economic impact was £2.84 for the UK economy.
The UKCG figures show that between 88 and 95 per cent of the wider economic impact is retained by the regional economy where the work takes place.
UKCG chairman James Wates said: “Would £1 billion investment in the automotive sector produce the same number of jobs? I would guess not.”
Wates, who is deputy chairman of Wates and vice-president of the CBI Construction Council, said the government should use existing public sector construction frameworks to get projects going as quickly as possible. “Rather than pull up the plant by the roots we have got to manage it so that we are getting the best from it,” he said.
He also encouraged construction firms to get involved with LEPs, organisations which include local businesses and councils which are designed to produce economic plans.
“There are a number of LEPs with construction representation trying to demonstrate that local investment can have a big impact.”
The research also reveals which local economies were hardest hit by the downturn in construction. The economic benefit of spending on construction in the North East fell by 23.4 per cent between 2007 and 2010 from £3 billion to £2.3bn, while in London and Scotland the fall was 2.2 per cent.
