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Monday, 23 July 2012

The Financial Benefits of the Olympics for our Economy

With the Olympics about to start and contracts coming to an end it's interesting to look at the impact of the Olympics on our economy. It's been a big investment so far but will reap rewards for businesses of all sizes small and large over the coming weeks.

So far British companies have been able to access almost £6 billion worth of contracts to build and supply the Olympic games, with 98% of contracts from the Olympic Delivery Authority going to UK based companies. Two thirds  of those went to small or medium sized enterprises.  Over 30,000 people will have worked on the Olympic site to get it ready as well as an approx contractor workforce of 100,000 to be employed during the event - although that figure will be slightly less now G4 have defaulted on their security contract.

On top of that LOCOG (London Organising Committee of the Olympic Games and Paralympic Games) are using an estimated £700m worth of goods and services. It's good news for businesses, despite the overbearing protectiveness of the Olympic brands taken against bakeries for example. It's good to hear that the government wants rules relaxed around this and also are relaxing Sunday trading hours over the Olympics so retailers will be able to make the most of the event.
In a speech recently David Cameron said he thinks the Olympics will generate around £13 billion for our economy - figures based on UKTI studies on the impact of other games such as Sydney.

He said: "I am confident that we can derive over £13bn benefit to the UK economy over the next four years as a result of hosting the games. I am certain that when you add in the benefits from construction the total gain will be even greater."

Goldman Sachs estimate we will see an increase of 0.3 - 0.4 % GDP in the third quarter this year. That's a good stimulus for a flagging economy in times of recession - however temporary or long lived the impact the Olympics will have on our economy it looks to me like a positive thing for our country and for business.

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