7th Annual Consultants Survey
Surveyed consultants still selected labor costs as the top site selection factor.
Geraldine Gambale, Editor, Area Development Magazine (Winter 2011)
(page 3 of 5)
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.
Also with a 96.8 percent importance rating and tied for the number-one spot in the Consultants Survey is state and local incentives - not surprising since incentives comparisons/negotiations are one of the consultants' primary jobs. Our corporate respondents only placed this factor in fifth position with an 89.3 percent importance rating.
More than half of the responding consultants say incentives are more important to their clients now than in the past (Slideshow, Chart V); nearly half believe tax incentives along with other financial incentives (grants, loans, and the like) are the most important types of incentives (Slideshow, Chart W); nearly half also say that more communities are instituting investment and/or job creation criteria that must be met in order for their clients to receive the incentives (Slideshow, Chart X); and 40 percent say incentive closing funds are the factor they have found most deficient in their recent evaluations for location and expansion projects (Slideshow, Chart Y). Moreover, 45 percent of the respondents to our Consultants Survey say their clients have not considered applying for U.S. government stimulus funds Slideshow, (Chart U).
It follows that two other tax-related factors placed among the consultants' top 10: tax exemptions was ranked seventh, with an 88.4 percent importance rating, and corporate tax rate is in the ninth place spot, with an 86.4 percent importance rating. The respondents to our Corporate Survey ranked these factors slightly higher.
Although the respondents to our Corporate Survey ranked highway accessibility as the most important site selection factor, it is ranked third by the responding consultants, considered "very important" or "important" by 95.8 percent of the respondents. Once again, a site needs good infrastructure access in order to make a client's short list of potential locations.
Fourth on the consultants' list of priorities is availability of skilled labor, with a 92.6 percent importance rating. This factor was in seventh position on the corporate respondents' list. Having a work force with the required skill sets is always important. But, interestingly, the availability of unskilled labor factor showed the greatest change since 2009 in the consultants' ratings - dropping 14 percentage points in importance to 47.9 percent and ranking 24th this year among the factors. The same reasons accounting for its drop in importance in the Corporate Survey (down 10.1 percentage points) can be blamed here, i.e., high unemployment rates have made a large pool of unskilled workers readily available and, therefore, not as much of a site selection concern for consultants and their clients. This reasoning - as well as the industry mix of the responding consultants' clients - might also be behind the second-largest drop in importance among the factors: the right-to-work state factor dropped 9.9 percentage points to a 71.3 percent importance rating, and fell from 13th position in 2009 to 20th in the 2010 Consultants Survey - the greatest drop in the rankings among the site selection factors.
The responding consultants ranked energy availability and costs fifth among the factors with a 91.5 percent importance rating. Consultants appear to be more keenly aware of the volatility of energy costs than their corporate counterparts, who only gave this factor an 82.1 percent importance rating. Also, nearly half of the responding consultants say rising energy costs are impacting their clients' facility plans (Slideshow, Chart Q). In fact, nearly four-fifths say sustainable development is more important to their clients now than in the past (Slideshow, Chart R). When it comes to measures to reduce a company's carbon footprint, 80 percent of the respondents to the Consultants Survey say their clients are making energy-saving modifications to their facilities, and more than 40 percent say their clients are seeking LEED certification for facilities, as well as recycling or re-using waste products (Slideshow, Chart S). Nearly 60 percent claim that the communities they are working with are offering their clients specific incentives for "green" initiatives (Slideshow, Chart T). Only 40 percent of the Corporate Survey respondents found this to be true.