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The economic, social and environmental benefits of stimulating repairs and improvements to the Scottish built environment to aid a green recovery from Covid-19

The construction sector is an important contributor to the Scottish economy – directly supporting £8.5bn in Scottish GVA and supporting over 170,000 full-time equivalent jobs in the economy.

The ongoing Coronavirus pandemic represents the greatest public health crisis in a generation and the subsequent economic crisis has been severe. While the economy will recover, and such recovery is already underway – albeit slowed down in recent months by local lockdowns and regional tiered restriction systems -, the pandemic will have a long-lasting and significant impact on the economy.

When the economy first locked down in March large parts of the construction sector ceased operations. As the economy began to open back up in the summer months the sector bounced back sharply and the recovery to date has been promising – economic activity in this sector is now 6% below pre-crisis levels.

Economic policy will be crucial in supporting this sector in the months and years ahead. However, effective policy requires understanding the economic contribution of this sector to the Scottish economy.

This report aims to highlight the economic impact of the construction sector, highlighting the multiplier effects that investment into this sector could stimulate and the potential economic impact that a VAT cut in repair and maintenance could have to support the Scottish economy in its economic recovery from COVID-19.