WIDER ECONOMIC IMPACT


• It is possible to calculate the direct and indirect impact of changes in the demand for goods or services, in terms of employment within the sector or within the wider economy. Using the most recent available data, the table below provides the multipliers for calculating the impact of changes in demand for both direct and indirect employment within the UK aerospace sector.


Multipliers


Manufacture MRO


Output Employment 1.663 1.871


1.819 1.968


GVA


2.107 2.030


Effects


Employment 0.432 0.498


GVA


0.545 0.724


• Multipliers and Effects: Multipliers provide a good estimate of the impact of a change in demand for the specific sector. The Employment or GVA effect can be used to calculate the impact of a change in demand in one sector, one the employment of Gross Value Added in the rest of the economy.


• Output multipliers: These figures show that for every additional £1m in demand for aerospace manufacture or MRO services, £1.663m and £1.871m of added-value is produced for the sectors respectively.


• Employment multipliers: These can be used to demonstrate that for every additional £1m in demand for aerospace manufacture or MRO services, an additional 1.8 jobs in aerospace manufacture will be created or almost an additional 2 jobs in MRO.


• Conversely, if demand dropped by the same amount, a reduction of identical value would result. The same calculation can be made with the other figures in the table.


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