How construction and infrastructure benefits local businesses

The construction industry has long been the focal point in economy-boosting efforts, both from a government standpoint and that of tradespeople and small business owners. The unseen growth in the construction industry in recent years has had a ripple effect throughout various industries.

Still, construction projects often cause controversy, from complaints about traffic tie-ups to unsightly disruptions. Each project plays a key role in economic growth, despite the challenges it brings. Here are a few of the ways construction and infrastructure benefit local businesses.

Local Supplies and Support

One of the main ways the construction industry directly impacts local businesses during a project is by procuring local supplies and support parts. Businesses such as Costex, a supplier of replacement parts for heavy duty machinery and equipment often used in the construction industry, benefit directly from these projects. The same business-boosting effects are felt in many secondary support businesses in the industry.

In addition to procuring local supplies and fostering B2B relationships, the construction industry employs local workers. In doing so, the local economy is improved, as tradespeople employed in the project have more income to pass along to other local businesses.

While a construction project may be wrapped up and completed, there will always be a requirement for maintenance and support. In infrastructure, this means having teams of workers and suppliers readily available to keep newly installed sidewalks free of debris, repair broken water mains, and patch potholes on roads. In this way, the construction industry cultivates continuous growth in a given area.

Indirect Support to Local Business

Unfortunately, not all projects consist only of local workers; many construction and infrastructure renewal efforts bring in talent from surrounding areas. However, even this can have a positive impact on local businesses.

A work crew that takes time off for lunch at a local restaurant or stops for a drink after work at a local pub is directly boosting the economy by bringing income from elsewhere and infusing it in local businesses. Everything from local gas stations to coffee shops could see an increase in traffic as a result of more workers in the area. This is especially true for long-term projects that require workers to take up temporary residence.

Home Building and New Residents

Housing developments are one of the many construction projects that have a significant impact on the local economy over time. According to a report by the National Association of Home Builders, the initial one-year impact of building 100 single family homes in an area equates to $28.7 million in local income and $3.6 million in revenue for local governments. This number incorporates the boost that takes place during the construction project itself, such as the previously mentioned expenditures by workers.

Beyond the first year, the NAHB’s research shows that the annual impact of building 100 single family homes amounts to $4.1 million in local income and $1 million in revenue for the local government. It’s also estimated that the initial project will create an average of 394 jobs directly, and 69 jobs each year following as a result of the economic boost.

As time goes by, the new income for both locals and the government will lead to new construction projects, more people moving in to support local businesses, and tremendous growth in the economy.

Tourism

In addition to attracting more residents to an area, improved construction and infrastructure results in improved tourism. Many small towns near the interstate experienced the negative side of this equation when more tourists opted for the highway that bypassed their businesses.

In many cases, however, more infrastructure means greater opportunity and more reasons for a town to become a stopping place.

The Ripple Effect of Construction

While the construction industry isn’t without negatives or challenges, a well-planned project can have lasting effects in a local economy, both in small towns and large cities. Small businesses are impacted both directly and indirectly by these improvements through project support and maintenance, and the people employed to see the project through.

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