Partner Article

London developments deliver £57m boost for Yorkshire economy

A new report produced by PwC and commissioned by business group London First has found that construction work in central London is delivering a £57m annual dividend and 1450 jobs a year to Yorkshire and Humberside.

London itself benefits to the tune of some £0.6bn annually. But the further contribution to regional economies across the UK is almost double that, at £1.1bn a year.

Similarly the 12,200 jobs supported in London annually are dwarfed by the 22,400 supported outside the capital.

A key factor in this “multiplier effect” is that some 84% of the investment in central London office development is spent in the UK - a higher figure than other industries.

London First asked PwC to analyse the direct and indirect impact of a sample of developments in central London that have been completed since 2008 or are expected to be completed by 2016.

Nine of the city’s principal developers agreed to take part in this work and allow access to their confidential proprietary data so that a full understanding of their construction expenditure, supply chain impacts and even employee spending could be developed.

Ian Morrison, partner and northern assurance Lead at PwC Leeds added: “While it is no surprise that London benefits from its own office development, the further contribution to the regions is huge with a significant part going to Yorkshire and Humberside.

“In addition £22m of wages in the region are from suppliers to Central London office developments. We must therefore continue to capitalise on these opportunities arising from London to ensure the long-term impact is felt, resulting in further employment opportunities, job security and a highly skilled workforce.”

The Central London office development covered by this study is equivalent to less than 10% of total London development. A sample of residential developments found that central London house building has similar multiplier impacts on the economy.

This was posted in Bdaily's Members' News section by Mark Lane .