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7th Annual Consultants Survey

Surveyed consultants still selected labor costs as the top site selection factor.

Winter 2011
Surveyed consultants say their clients are responding to the recession by finding new ways to optimize the layouts and space of their existing facilities. See the slideshow for all charts.
Surveyed consultants say their clients are responding to the recession by finding new ways to optimize the layouts and space of their existing facilities. See the slideshow for all charts.
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The responding consultants' work is concentrated in the South Atlantic (North Carolina, South Carolina, Virginia, and West Virginia) and Midwest (Illinois, Indiana, Michigan, Ohio, and Wisconsin) regions, which are slated for 13 percent and 15 percent of their clients' new facilities, respectively (Slideshow, Chart I). These two regions are also receiving many of the corporate respondents' new facilities. The consultants' clients are planning about a quarter of their new domestic facilities as manufacturing plants and another quarter as warehouse or distribution centers (Slideshow, Chart J).

About a third of the foreign location projects the consultants are working on are slated for Asia (
Slideshow, Chart K), a choice reflected by nearly half of the respondents to our Corporate Survey. Of the consultants' clients' new Asian facilities, about a third will go to China, 16 percent to India, and another 16 percent to Singapore. Interestingly, the corporate respondents slate a third of their new Asian facilities for China, nearly 30 percent for India, and 17 percent for Singapore.

Those responding to our Consultants Survey are working on many more projects for Mexico and Canada (14 percent for each) than those responding to our Corporate Survey (just 6 percent for Mexico and 9 percent for Canada). Eastern Europe is a favorite for the consultants' clients who slate 10 percent of their new facilities for that part of the globe, similar to the 12 percent of the corporate respondents planning new facilities there.

Thirty-five percent of the new foreign facilities to be opened by the consultants' clients will be manufacturing plants and about fifth warehouse/distribution operations (
Slideshow, Chart L). This reflects the fact that more of the consultants' clients' manufacturing plants are going offshore than stateside, a conclusion not borne out by the responses to Corporate Survey. The results are also indicative of the industry mix of the consultants' clients, as well as the notion that consultants are utilized more on foreign than domestic location projects. Their expertise is more necessary and sought after when dealing with foreign governments and regulations than with U.S. governmental and other agencies.

Further validating this conclusion is the fact that 40 percent of the respondents to our 2010 Consultants Survey say they have seen an increase in the number of companies establishing foreign facilities as opposed to domestic ones over the last year (
Slideshow, Chart M). Nearly all of the respondents to our Corporate Survey (96 percent) said their companies did not intend to locate a domestic facility offshore.

Conversely, a quarter of the responding consultants claim their clients intend to locate a foreign facility back onshore, a somewhat complicated endeavor. Only 2 percent of the corporate respondents made such a claim. More than a third of the responding consultants cite rising foreign labor and transport costs as well as product quality issues as the primary reasons their clients are considering moving offshore facilities back to the states (
Slideshow, Chart N). A similar percentage say recent geopolitical events have actually caused their clients to avoid investment in specific areas of the word (Slideshow, Chart O).

Consultants' Site Selection Priorities
The 2010 Consultants Survey takers were asked to rate the same site selection and quality-of-life factors presented to the Corporate Survey takers as "very important," "important," "minor consideration," or "of no importance" to their clients. The consultants' rankings are similar in some respects to those of the corporate respondents. In fact, nine of the top 10 factors are the same on both the corporate respondent and consultant respondent lists, albeit in slightly different orders (
Slideshow, Chart P). Let's take a look:

The responding consultants rank labor costs as the number-one site selection factor, considered "very important" or "important" by 96.8 percent of the respondents. Labor costs placed second in the Corporate Survey.

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