Induced Spend

What is the Definition of Induced Spend?

Induced spend is the economic activity generated when workers employed across the direct and indirect tiers of a procurement transaction spend their wages in the local economy. Purchases like groceries, housing, healthcare, and retail goods recirculate through the regional economy, creating yet another layer of jobs and income. Induced spend is the third and outermost tier of the multiplier framework used in economic impact analysis, and together with direct and indirect spend, it determines the full economic footprint of a sourcing decision.