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Housing slump and negative multiplier effects

Geoff Riley

11th July 2008

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This article in the Financial Times is a good example of how a fall in demand and activity in one industry can have negative multiplier effects on related industries up and down the supply chain. Barratt Developments has announced that it is laying off twenty per cent of its workers and that “job cuts across the industry could reach 60,000 out of 300,000 people employed directly and indirectly in the sector. - The Chief Executive is quoted as saying that there would be a “secondary effect on the supply chain, comprising kitchen companies, solicitors, mortgage advisers, estate agents and so on,”

BBC: “More job losses at UK housebuilders”

The Guardian: “Barratt cuts 1,200 jobs to cope with housing slump”

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Geoff Riley

Geoff Riley FRSA has been teaching Economics for nearly forty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD and Revision conferences in the UK and overseas.