Area Development Homepage >> Annual Reports >>

Corporate Executive Survey Analysis: A Hopeful Indicator That Manufacturing May Soon Have a Domestic Resurgence

Only 2 percent of respondents reported that they plan to relocate a domestic facility to an offshore location. This is a hopeful indication that manufacturing may soon have a resurgence in the United States, even though 97 percent of respondents say they do not plan to bring a foreign facility back to the United States.

Robert E. Leak, Sr. CEcD, HLM, Partner, Leak-Goforth Co., LLC (Winter 2012)

Editors Picks

A comparison of the combined ratings of site selection factors between 2011 and 2010 contains few surprises. Those factors scoring better than 50 percent combined ratings are the same, with some slight variations, as those of recent years. The corporate respondents are continuing to express their primary interest in a site for a new facility that represents one with a favorable overall cost of doing business.

They also express an interest in a community that is friendly toward business with reasonable environmental regulations, fast-track permitting, and a welcoming attitude on the part of community leaders. These factors - coupled with a good quality of livability - have been, are, and in all probability will continue to be the driving influences of corporate site selection. This assumes of course that the geographic location from a marketing perspective and the transportation requirements can be met.

As for the numbers, sizes, and types of facilities being represented by the respondents, there is little deviation from the past several years. Manufacturing and warehousing still lead the type of new domestic facilities to be opened, although job creation is tending to be smaller, with 83 percent of the new facilities accounting for fewer than 100 workers.

And new facility numbers are still somewhat constrained: only 43 percent of the respondents say they will open new facilities within the next two years. This is probably due to a continuing lack of confidence on the part of management caused be political dysfunction, with regard to dealing with the federal deficit and relaxation of overly stringent regulations on businesses.

The results of the survey also confirm the importance of states and communities providing the most competitive business environment possible. Whereas there is indication that new location searches are down from the heady pre-recession years, there is still some important activity, albeit with fewer new facilities being opened and fewer jobs being created.

Even though present indications are for a reduction in the unemployment numbers, which is vital for a return to normalcy, and in spite of our firm's opinion that the economy will improve significantly by the 4th quarter of 2012, there is still pessimism among the Corporate Survey respondents, with some 80 percent saying that things won't get better until 2013 and beyond. Interestingly, this corresponds with the timing of the next national elections. Until there is clarity regarding the next administration, business management will apparently remain cautious.

Site selection internationally still favors Asia, with 57 percent of the planned Asian facilities heading for China and India, even though Vietnam and Singapore are becoming more viable. That being said, still only 2 percent of respondents reported that they plan to relocate a domestic facility to an offshore location. This is a hopeful indication that manufacturing may soon have a resurgence in the United States, even though 97 percent of respondents say they do not plan to bring a foreign facility back to the United States.

Although the survey is not particularly bullish on economic expansion in 2012, we believe we have bottomed out of the recession and should see a significant pickup in new facility locations this year.

Save/Share Article

About the Author

Robert E. Leak, Sr. CEcD, HLM, Partner, Leak-Goforth Co., LLC
Bob Leak served as President of the Research Triangle Park Foundation, 1984-1988, during the time when major infrastructure improvements were made to the park. Leak also helped develop special legislation which created the park as a "Special Service District: which allows the park to function as a self-contained community not subject to annexation by any town." Other significant achievements include directing the North Carolina and South Carolina industrial / economic development programs for a total of 24 years.

ASK AREA DEVELOPMENT

Have questions, comments or concerns about this article? Submit to Ask Area Development here and the author or an expert from our network of site selection and facility planning professionals will answer:

Privacy policy / GuidelinesArea Development will select a number of questions to answer each week. An Area Development representative will contact the submitting reader directly with feedback. Additionally, all submissions are eligible to appear online or in our print publication. If your question is selected for publication we will include and publish your first name, job title and industry only. The full identity of the submitting reader will not appear in published format.Area Development will not publish, share with any third parties, or use for marketing purposes any personal information submitted here without the express consent of the submitting reader.

News Items

Around The Web

Studies/Research

News Items

Around The Web

Studies/Research

Dynamit Technologies Plans Expansion In Columbus, Ohio’s Arena District

State Resource map

Click on any state for links to current state news and data, contact directory, corporate taxes, financial and business incentives, credits, grants and available buildings and sites

State Resource Sponsor