How construction management can support the local economy

28th November 2022   |   Liz Clarke   |   Reading Time: 3 minutes

As the UK’s largest industry, the construction sector is the foundation of the UK economy, contributing 7% of GDP and over £122 billion to the UK’s economy in 2021.

As such, the sector has huge reach, both nationally and locally, with a pivotal role to play in developing local communities and economies. 

The annual Social Value Benchmarking Report, from public sector procurement specialists Scape, has recently published that over £1bn of local economic and social improvements were made by the UK construction industry in 2021, a 14% increase on the previous year.

Whether commercial or residential, large or small; as part of this fundamental industry, all construction projects have great scope to support local economies both during project development and after completion.

Employment opportunities and training

Accounting for three million jobs and 10% of total UK employment, the occupational opportunities resulting from construction projects are one of the primary ways in which the sector can support the local economy.

Whether it’s direct employment to the project, contracting, or supporting services and products, the jobs generated from construction are far-reaching and have a significant impact on the local community and economy.

But skills shortages in the construction industry are a long-standing issue and all stakeholders in the industry have their part to play in ensuring high-quality construction training is available and adopted so that the sector can attract, retain, and develop the skills it needs.

Supporting local suppliers

One of the main ways the construction industry directly supports the local economy during a project is by using local suppliers.

The demand for materials and services generated from construction projects is instrumental in keeping entire subsidiary industries going.

This can mean the sustenance of many more jobs within the large companies of those supporting industries, as well as countless local suppliers and businesses being supported by the ripple effects of a construction project.  

The supply chain benefits to the local economy can be direct through the procurement of local products and services to a project, or indirect through the knock-on effects to other businesses of having new customers in the locality both during the build and after completion – whether that be new residents or employees in the area from a commercial development.

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Improvements in infrastructure

A construction project in its very nature might be to improve infrastructure – like the building of new roads, schools, or hospitals. But even in the case of other developments, there are few construction projects that won’t have a positive impact on local infrastructure in some way.

Section 106 Agreements between developers and local authorities support the provision of local infrastructure and community facilities and the Community Infrastructure Levy (CIL) has increasing uptake from local authorities on new developments in their areas to support essential community services like schools, transport improvements, and green spaces.

Economic growth

Beyond the direct economic benefits to national and local GDP, construction is a stimulus for future development and growth.

Construction creates an opportunity for investment which can in turn generate economic growth and regeneration for a local economy.

The end result of many construction projects also has positive impacts on local economies. If the construction project is residential, it can help to develop local communities and alleviate housing challenges. If it’s commercial, it can foster regeneration and new economic stimulation.

How to maximise the positive impact of your construction project on the local economy

A construction project of any size has the capacity to generate a significant and lasting positive impact on the local community and economy if managed conscientiously.

To maximise the positive impact of your construction project on the local economy, seek to use local small businesses and locally sourced labour, goods, and services to boost local spend.

Over 90% of construction companies and those supporting the industry are small businesses, making them fundamental to the industry as a whole and the local communities in which they operate.

As well as supporting the regional economy, using local suppliers is likely to have big benefits for your project too, with turnaround and delivery times likely to be more convenient and efficient, as well as the benefits of their good knowledge of the local area.

To maximise those supply chains for both your project and the local economy, consider working with a dedicated construction consultancy to get specialist support in supply chain and construction management.

How Evolution5 can help

Evolution5 is an award-winning, RICS-registered professional consultancy offering construction management, project management, quantity surveying, employer’s agent, and contract administration services for projects across London and the South East.

Evolution5’s aim is to deliver responsible, reliable, and conscientious construction management to ensure a positive impact and better lives for local communities and economies.  

If you have a construction project and would like to explore how the team can help you, click the button below or call 023 8040 5073.