A CONSTRUCTION company which sources its goods and suppliers from the North-East boosted the regional economy by about £357m as a result of its local buying strategy, new research has found.

By contracting services from within the region wherever possible, Esh Group helped generate hundreds of millions of pounds for the North-East in 2007, a study from Durham Business School has found.

The County Durham company was found to have a Local Multiplier (LM3) figure of 2.38, which shows that for every £1 Esh Group receives in income, a further £1.38 is generated in the local economy. Last night, more businesses across the region were urged to follow the example of Esh Group – which includes the Lumsden and Carroll and Dunelm Homes subsidiaries – in helping to support local businesses while benefitting the wider North-East economy.

The research also supports the Buy North-East campaign, run by The Northern Echo with the North-East Chamber of Commerce (NECC), which urges the region’s companies to award more contracts locally.

NECC research has shown that by contracting an extra one per cent of work locally each year to 2016, the North-East economy could grow by £1.35bn, and would see the creation of 6,000 jobs.

James Ramsbotham, chief executive of NECC, said evidence suggests that if all businesses adopted such a strategy, the regional economy could be boosted by more than £20bn a year.

“Buying local makes absolute sound economic common sense.

Clearly there will be exceptions in some companies, however, it is in all our best interests to buy local wherever possible – and here is the hard evidence to prove it,” he said.

Durham Business School’s findings are the first phase of a two-year study into the economic value of Esh Group’s proactive policy to award work within the North-East instead of outside.

Professor Rob Dixon, Dean and professor of management accounting at the business school, said: “The findings of this study are very important. They clearly show that Esh Group, through employing a conscientious commercial strategy, has delivered significant financial benefit to the economic territory in which it is based. This is a powerful message for those seeking to invigorate the North-East economy.

Our findings suggest that we need look no further than our own backyard in order to infuse economic vibrancy.”

Brian Manning, chief executive of Esh Group, said the group is very proud of the findings.

“Now we believe it’s important to ask ‘What next’? We hope that by showing the very real benefits of our ‘buy local’ policy that others may follow our lead,” he said.