SPENDING on construction significantly benefits the UK economy, according to independent research.
A report by international strategy consultancy LEK Consulting showed that construction was the best sector for stimulating employment.
The report, commissioned by building industry body the UK Contractors Group, said that for every £1 spent on construction leads to an increase in GDP of £2.84.
In some areas, such as building schools, the economic benefits of construction are even more pronounced.
LEK Consulting estimates that every £1 spent in this area leads to a total economic benefit of between £3.87 and £5.04 – partly because of the direct benefit to the economy – but also because of improved education services that lead to a long-term benefit via a higher-skilled workforce.
The report follows figures last week showing that GDP fell by 0.4% in the third quarter of this year.
It makes the case for continued investment in construction projects that are crucial to the long-term future of the UK economy.
John Cridland, CBI deputy director general, said: "With the Chancellor’s Pre-Budget Report looming, the CBI is continuing to press the case for protecting capital spending by government.
"A strong economy needs fit-for-purpose schools and hospitals and it will be the construction industry that builds the new transport and energy infrastructure needed to shift to a low-carbon economy."
James Wates, chairman of the UKCG, said: "This is the first time the industry has put together a set of compelling and powerful arguments to support the case for investment in infrastructure.
"Now is the time for the whole industry to come together behind the CBI to press the message home."
The report said the construction industry was a driver of growth in other sectors due to its heavy reliance on an extended and varied supply chain.
The sector also relied little on imports – so that investment was more likely to generate additional economic activity within the UK.
The report added: "Construction is not only immediate economic production.
"It is also investment rather than consumption, which provides significant long-term economic and social benefits to the country."