Indirect Spend

What is the Definition of Indirect Spend?

Indirect spend refers to the secondary economic activity generated when a supplier purchases inputs — materials, services, and goods — from other businesses in order to fulfill a contract. These business-to-business transactions ripple outward through the supply chain, supporting additional jobs and income beyond the original supplier relationship. In economic impact analysis, indirect spend is the second tier of the multiplier framework, sitting between the direct effect of the initial procurement and the broader household spending it eventually enables.curred in the manufacturing of a product or delivery of a service, e.g., insurance.