Olympics Fail to Boost London Businesses: Report
Most Londonfirms say business has not been boosted by the upcoming Olympic Games, according to a report by UK real estate firm Business Environment.
In a survey of 150 companies based in London, South-West England and South-East England, only 10.7 percent said business had increased in the build-up to the Games, which will start on July 27. This figure was slightly higher in London itself, with 13 percent saying business had risen.
“While the Olympics are likely to be an inspiring sporting spectacle, and at the very least a great diversion for a country in recessionand struggling through the wettest summer in years, they are not having the effect on business that many had predicted,” said Director of Business Environment David Saul in the report.
“I have barely met anyone who has a new contract as a result of the Olympics, or expects a surge in business as a result of the Games. The impression, true or not, is that contracts have been awarded to very large companies, for whom this is simply one more event in the season,” he said.
Three-quarters of London firms predict there will no increase in business even once the Games are underway.
Myriam Durand, director of corporate finance for Europe, the Middle East and Africa at Moody’s Ratings, said economic benefits from the Olympics will be short-lived.
“In the short-term a few sectors are likely to be winners… through additional revenues,” Durand toldCNBC on Thursday.
Durand identified infrastructureas a sector which benefited during the build-up to the Games, with 40,000 construction workers required to build the necessary facilities, 10 percent of whom were previously unemployed.
During the event, Durand said the hospitality, accommodation, transportation and business services sectors would profit from the additional tourismgenerated. An extra 800,000 tourists are expected in London for the Games, with 300,000 coming from overseas and 500,000 from other parts of the UK.
After the Games, organizers hope to convert the mediacenter at the London Olympics site into a hub for technologyand creative industries, with the potential to generate up to 4,000 jobs.
For another view on whether the 2012 London Olympics will benefit UK businesses, watch this video.
To read articles about other Olympics issues,click here.
— By CNBC.com's Katy Barnato