UK economy set to receive £16.5 billion #Olympic boost
The UK economy is set to benefit from a £16.5 billion GDP boost from the Olympic and Paralympic Games, according to a study from the Lloyds Banking Group.
Construction and tourism are key sectors that will drive economic activity as a result of the event, its build up and legacy, which the study believes will create jobs and opportunities for businesses.
Small and medium sized enterprises (SMEs) in particular are expected to contribute to more than half (52 per cent) of the overall GDP increase.
It is also anticipated that London 2012 will create what is being dubbed as a ‘happiness effect’ amongst consumers – improving confidence and increasing spending.
Patrick Foley, chief economist at the Lloyds Banking Group said the Games ‘could not have come at a better time given the tough conditions in the UK economy.’
According to the study, the majority of the GDP increase (57 per cent) will stem from construction projects in the run up to events, while (24 per cent) will come from legacy construction activity in the following five years.
Around 800 construction contracts have been awarded to businesses across the UK as a direct result of the Olympics, with 25 per cent going to suppliers in London and 75 per cent being awarded to firms around the country.
Related tourism as a knock-on effect of the games is expected to bring in 12 per cent of the growth, with estimates that competition events will attract up to ten million visitors.
The study also indicated that an additional 62,200 jobs would be supported by the Games, both in London and around the UK.
John Maltby, group director for Lloyds said: “The London 2012 economic engine is being fuelled by thousands of small and medium sized businesses, many of whom are based outside London that might have otherwise assumed they had nothing to Gain from the Games.
“We know that these businesses hold the key to growth, and even if it is still uncertain whether London 2012 can help to kick start a sustained economic recovery, the benefits to businesses are clear – unprecedented opportunities for trade and a real competitive advantage in years to come; invaluable training and experience for employees; and an incredible contribution to economic activity across the UK.”
In addition to the GDP impact, there is also expected to be a significant legacy impact to the physical environment and labour market, with the building of up to 3,850 homes on the Olympic site, and lasting benefits from employee training to those involved in construction of the games.