The socio-economic impact of businesses in the railway arches
Supply chain and multiplier impacts
5.12
The Arch Company portfolio indirectly supports employment through its interactions with supply chains. Businesses operating at The Arch Company properties support employment in their respective supply chains by buying supplies, employing business services, or providing goods upon which other businesses rely. The ‘multiplier’ measures the magnitude of this supply chain effect, providing an estimation of how many additional jobs are supported by a job in a given industry. For example, the manufacture of motor vehicles, which requires a large number of specialised parts and equipment, has a high multiplier. Conversely, veterinary services, whilst important, do not require large-scale supply chains and logistics and so has a low multiplier. In this report we combine existing ONS national multiplier estimates for industrial classifications with workspace and employment data to estimate the multiplier for each category of job supported by the portfolio. 46 These multipliers are then applied to the number of FTEs supported by industry to estimate the indirect FTEs associated with the portfolio. In addition to the number of workers generated by activity within the supply chain of organisations in The Arch Company portfolio (indirect employment generation), The Arch Company would support additional employment through the spending by workers located in The Arch Company spaces. Taking the total of £47.4m spent by workers locally each year, it is possible to estimate approximately how many jobs this would deliver in addition to those supported by the supply chains of organisations within The Arch Company portfolio. T he supply chain impacts of the currently operating companies in The Arch Company spaces are estimated to indirectly support a further 16,100 FTEs, and worker expenditure is expected to support a further 1,400 FTEs on top of this figure. This creates a combined figure of a further 17,500 FTEs supported in addition to those directly based within the portfolio. By analysing the composition of each industry’s supply chain in conjunction with industry standard multipliers, it is estimated that the indirect and induced FTEs generate £1.3bn of GVA . When combined with the current GVA that is directly supported by the portfolio, the total GVA associated with the portfolio is £3.3bn . If the commercial property occupied within The Arch Company portfolio were a local authority, and these indirect and induced impacts are taken into account, it would rank above 162 of the 375 local authorities in the UK in terms of its economic contribution.
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Economic impact within six case study areas
5.17
This report presents the key economic impacts of The Arch Company in six case study local authorities of Southwark, Lambeth, Tower Hamlets, Wandsworth, Manchester, and Hackney. These local authorities represent some of the local authorities with the highest amount of commercial floorspace operated by The Arch Company, together amounting to 46% of the total commercial space within The Arch Company portfolio. As shown in Table 5.3 below, The Arch Company space supports an estimated 4,900 FTEs within the borough of Southwark alone. Taking these six areas in combination, The Arch Company portfolio supports over £870m in economic activity (as measured through GVA) every year.
5.18
46 Multiplier impacts taken from ONS, 2023. FTE multipliers and effects, reference year 2019
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