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5th Annual Consultants Survey

Dec/Jan 09
(page 3 of 4)
Energy availability and costs was ranked fourth by the responding consultants, who gave it a 90.7 percent combined "very important" or "important" rating. More than 40 percent of the respondents said rising energy costs (especially over the period preceding this survey) were impacting their clients' facility operations and also affecting their supply and distribution network decisions (Chart W).

Increasing fuel costs are probably responsible for the heightened importance given to railroad service. Although this factor was only ranked 23rd by the responding consultants, it showed the largest increase in importance over last year's consultants' ratings; the rating of railroad service rose an astonishing 42 percent, with its combined rating in importance increasing from 35.1 percent to 50 percent. Remember that nearly half of the responding consultants said they have helped to site warehouse/distribution facilities; they and their clients have realized the energy costs savings that can be achieved through the use of railroad service over trucking.

Closely related to energy issues are environmental concerns. All the talk about "green" or sustainable development should be reflected in the consultants' ranking of the environmental regulations factor. However, this factor only bumped up slightly in importance to a 71.6 percent combined rating, and its 17th place ranking held steady. Nonetheless, when asked if environmental concerns were more important to their clients now than in the past, 72 percent of the respondents to our 2008 Consultants Survey said, "Yes" (Chart X). In response to this, 100 percent said their clients were undertaking energy-saving facility modifications, and 70 percent said their clients were also recycling or re-using waste products from their operations (Chart Y). However, unfortunately, nearly two thirds of the respondents said the communities they have worked with are not offering any specific incentives for green initiatives.

Occupancy and construction costs moved up to the sixth spot in the consultants' rankings this year, with an 87.1 percent combined rating, from 11th place in 2007, with an 84.4 percent combined rating. But, strangely enough, labor costs dropped from third place in last year's Consultants Survey, with a 93.8 percent combined importance rating, to tenth position in the 2008 Consultants Survey, receiving only an 82.8 percent combined rating - an 11 percentage point decline and the third-largest decrease in the ratings among the site selection factors. Labor is a recurring cost and I would have expected the consultants to say this factor was of greater importance to their clients then reflected by this year's results. Perhaps all of the recent employee layoffs are keeping these costs down and are responsible for this factor being given lower priority.

The factor showing the greatest decline in the ratings overall (14.5 percentage points) is expedited or fast-track permitting. Again, 50 percent of the respondents to our 2008 Consultants Survey said their clients' new facilities plans had been put on hold so "fast-tracking" projects might not be as important as in previous years.

And the site selection factor showing the second-largest drop in the ratings given by the responding consultants (down 12 percentage points) is availability of advanced ICT services. The respondents to our 2008 Consultants Survey ranked this factor 14th, with a 72.8 percent combined rating, down from 10th place in 2007, when they gave it an 84.8 percent combined "very important" or "important" rating. The rating of this factor was an anomaly in both the Corporate and Consultants surveys, and I offer up the same explanation for both. Our description of advanced ICT services last year was "high-speed Internet, wireless, VOIP, etc." This year we changed that to read "T1, T3, OC" - more esoteric terms. Next year, we'll try to keep it simple again and see if this factor bounces back up in the rankings.

Those responding to our 2008 Consultants Survey rated the same quality-of-life factors in first and second place as those responding last year: ratings of public schools was ranked first, with a 73.7 percent combined rating, followed by low crime rate in second place, with a 71.6 percent rating. The responding consultants also ranked the same two quality-of-life factors as least important as were ranked as such by the respondents to our 2008 Corporate Survey - recreational opportunities and cultural opportunities. Again, these factors take a back seat to other site selection and quality-of-life concerns during turbulent economic times.

Finally, 78 percent of the responding consultants said their clients consider whether there are business performing similar activities to theirs in the area of search (70 percent of those responding to our Corporate Survey also said this was a consideration). And 41 percent of the responding consultants also said their clients elect to meet with representatives of these area businesses during the location process (Chart Z).

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