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This boost in investment and consumption highlighted from both Londoners, domestic contributors and overseas tourism have also offset valuable overseas contracts where London would have a part in designing similar venues for future Olympics; the contracts roughly amount to around £1.5billion, which provides the UK extra monetary boosts and injections into the system as they have created jobs and work for the economy for the future. This is promising to the nation and is necessary for growth for either all nations involved in constructing future Olympics.
Economic growth of nations is also perpetuated from jobs maintaining Olympic stadiums created for specific events; income is generated as well as injections into the system as the Olympic parks can be rented or sold to such football clubs etc. Additionally, following on from research found regarding overseas contracts, contracting the design of stadiums; Britain was a leading architectural force behind many of Russia’s winter Gardens and Palace stadiums in which was used for the following Winter Olympics in 2014, (Sochi, Russia). Consequently, showing resurgence in both economies as the success is emulated and passed onwards.
Although, jobs and money generated UK economic growth - it is however, near impossible to determine the exact volume of economic activity purely attributed as a result of the Olympics. Inwards investment can be counted, but attention to a global phenomenon is immeasurable. Sports economist, Stefan Szymanski, agrees, “It is impossible to tell how much of the economic activity could be put down to the Games.”
The resurgence of the UK economy due to London 2012
Between July to September, although the Games only lasted 16 days from opening to closing ceremony, these was the most crucial and most impactful days in which helped emerge the UK economy from recession. According to the Official for National Statistics, Gross domestic product figures reflected that the economy grew by 1%, with Olympic ticket sales specifically totalling up to 0.2 percentage points. These figures are from Office of National Statistics and are considered reliable; hence why the figures are warming news to business ministers.
Additionally, reinforcing the boosted consumption and growth rates (represented by GDP figures), the service sector has also been estimated to have grown by 1.0% within the 3rd quarter of 2012, after a contraction of 0.1% seen in the previous 3 quarters. This has further surpassed all expectations from Economists who had predicted only 0.6% increases.
The recession seemed have cleared and being on the right track which is what the UK desperately needed after months of recession. With these figures being as a result of external shock; Olympics, it is fair to say the resurgence of the UK economy has been achieved as a result of the event. Still feeling the effects of the 2008 financial crisis, the Olympics was vital in providing strength and economic activity for the British people; with confidence now regained, the ‘Olympic effect’ would be more apparent as increased activity is seen around hotels and restaurants. The multiplier effect is especially highlighted for catering services around the Olympic Village and nearby boroughs as international and domestic consumers seek to buy memorabilia to remember the occasion and thus boosting consumption components of aggregate demand which in turn increases overall GDP of the country.
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