Contribution to the local economy will be greater if the contractors and tradesman are local SMEs
I would like to ask a question regarding the mystical £2.84 [that every £1 invested in construction generates £2.84 of GDP] (13 July, page 3). What is the difference if the £1 is spent through small regional contractors compared with national firms? I would suggest that the contribution to the local economy, where the project is located, will be greater if the contractors and tradesman are local SMEs.
Where sustainability falls down in the UK is large national contractors winning work despite their head office and trade and subcontractors being located hundreds of miles from the project in question.
For example, a school is currently being built in a village in Northern Ireland. The main contractor’s head office is 100 miles away and none of the trade contractors are local. Even material deliveries are from merchants outside the area. The net result is a major capital project that provides no economic stimulus to the local economy.
The definition of economic stimulus of GDP needs better analysis, in particular the difference between engaging local suppliers in the supply chain and large national contractors.
Patrick Murdock, via Building