Chain reaction.
Britain needs every penny of industrial investment it can get. Everyone says so. But why?
k Because it makes us more competitive '4' replacing ageing plant? Because it
creates construction jobs? Yes, but more besides When a company spends millions on caPital investment, we tend to think about the effect of the new plant and forget about Where the money goes; as if the new plant Was the end of the story. But that money sets off a chain reaction which releases fresh energy into the economy, stimulating new activities and ideas.
It generates wealth.
One order to a contractor starts a chain of orders to sub-contractors and suppliers. And every order means jobs, pay packets to be spent or invested ... and even social benefits — because at each link in the chain the taxman takes his share.
Some contractors will have to invest in new capacity to meet their orders; so they'll be setting off fresh chain reactions of their own. Growth breeds growth.
It's a phenomenon sometimes known as the 'multiplier effect', because the total economic activity stimulated is worth far more than the original outlay.
The effects of Mobil's current £150 million refinery development project in Essex are being felt all over Britain. The wealth it generates is being spent in shops at the other end of the country by people who've never even heard of the project itself.
And when our new investment is complete, that won't be the end of the story. Its impact will still be triggering new reactions a long, long way from Essex.
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