A new report has claimed the Scottish economy gains £9m a year from construction projects in London.

In its report, which was produced by PricewaterhouseCoopers (PwC), business group London First said a total of 2010 Scottish jobs were also supported on an annual basis as a result of London construction.

Baroness Jo Valentine, Chief Executive of London First, said: "The value of investment in London is huge in terms of generating jobs and economic benefits in London itself, but the knock-on contribution to regional economies is more impressive and shows the boost that London businesses provide to the rest of the UK.

"The fact that it can attract this private sector investment, against competition from other international hubs such as New York or Dubai, is a sign of continuing global confidence in London and its future growth. But it's vital that the Government makes a similar commitment to public sector investment in the city's infrastructure - particularly its transport system."

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Lindsay Gardiner, Regional Leader at PwC in Scotland, added: "Investment in infrastructure has long been held as a key to boosting job creation and stimulating growth across the UK’s regional economies.

"This research certainly reinforces the positive impact that construction and development activity alone can have on businesses and communities, not only in their local area but further afield.

"With the rate of development in London showing no sign of slowing down over the next few years, the challenge will be for businesses in Scotland to not only ensure they remain competitive, but well positioned to play a key role within this buoyant supply chain.

"With Scotland’s construction sector strongly outperforming the, admittedly weak, performance across the UK as a whole, we can perhaps draw some parallels here. This positive trend can, in part, be attributed to the Scottish Government’s focus on infrastructure spending in recent years.

"With major programmes such as the Forth Road Bridge crossing and Aberdeen Western Peripheral Road in the pipeline, along with plans for a high speed rail link between Glasgow and Aberdeen and improvements to the A9 and A96 into Inverness, we could hope to see this multiplier effect continue to ripple out across towns in Scotland.

"The challenge, of course, will be maintaining this momentum in an economic environment that shows limited prospects of growth in the short term and an increasingly tightening fiscal squeeze."

(JP)