We also asked those taking our Consultants Survey to rate the site selection and quality-of-life factors that come into play in their clients’ location and expansion decisions as either “very important,” “important,” “minor consideration,” or “of no importance.” These ratings are shown in Chart V. We then added the “very important” and “important” ratings in order to rank the factors in order of overall importance, as shown in Chart W.
Interestingly, the same two factors are ranked 1st and 2nd by the Corporate Survey and the Consultants Survey respondents - availability of skilled labor and highway accessibility. Availability of skilled labor is ranked as the most important site selection factor by the consultants with a combined 98.3 percent importance rating. This has become the primary concern of the consultants’ clients.
And more than three quarters of the responding consultants also say higher unemployment rates are not making it easier for their clients to find the labor they need, with more than two thirds saying the unemployed are primarily lacking advanced skills (Chart X). Additionally, because of this, three quarters of the consultants also say their clients have become very or somewhat dependent on contract workers (Chart Y), although 81 percent claim this contingent labor force comprises less than 25 percent of their clients’ work forces at any given time (Chart Z).
The consultants generally rank state and local incentives as more important than do the Corporate Survey respondents, and this year is no exception: 93.8 percent of the respondents to our Consultants Survey rate this factor as “very important” or “important,” placing it 3rd in the rankings. This comes as no surprise since about 70 percent of the respondents say they provide incentives negotiation and management services to their clients. A related factor, tax exemptions placed 7th with a 91.9 percent combined importance rating. In a related question about types of incentives, nearly 70 percent of the responding consultants say cash grants and tax incentives, including credits and exemptions, are the two most important types (Chart EE).
The factor showing the largest jump in the consultants’ rankings — eight positions to 4th place — is available land, which also has the largest percentage increase in the Corporate Survey. The responding consultants give available land a 93 percent combined importance rating. This appears to be a determining factor when consultants assist with build-to-suit projects — especially those requiring large parcels of land such as new state-of-the art distribution centers to support the growing e-commerce sector. Moreover, 78 percent of those responding to our Consultants Survey say the existence of a shovel-ready or pre-certified site is very or somewhat important in their clients’ site searches (Chart JJ).
In 2011, Mark Sweeney, Principal of McCallum Sweeney Consulting, provided some insight into the role of a state’s right-to-work status in the site selection process, in testimony to the Missouri State Senate. “Companies believe this gives them greater work force flexibility, thereby allowing them to compete more effectively and in a more timely manner," Sweeney explained. “Manufacturing clients express an interest in considering [locations] only in right-to-work states,” Sweeney added, although his firm recommends that right-to-work state be just “another scoring criteria” and not a “pass-fail” decision.
The respondents to our Consultants Survey rank energy availability and costs 8th among the site selection factors, with a combined 88.6 percent importance rating. A third of the respondents say energy costs are primarily affecting their clients facility operations and a fifth claim they are primarily affecting their clients’ supply/distribution network decisions (Chart AA). Nevertheless, more than 60 percent say they believe new unconventional sources of energy will drive down their clients’ energy costs, with more than half also believing this will affect their clients’ location decisions (Chart BB).
Three quarters of the respondents to our Consultants Survey also say sustainable development is more important to their clients now than in the past. In response to this, more than 80 percent claim their clients are making energy-saving modifications to their facilities (Chart CC). A like percentage of respondents to the Corporate Survey made this claim as well. And half the responding consultants say they are seeing communities offering incentives specifically for “green” initiatives (Chart GG).
Low crime rate, which is always ranked 1st by our Corporate Survey respondents, is ranked 2nd in the Consultants Survey with 78 percent of the respondents considering this factor “very important” or “important.”
The quality-of-life factor showing the largest increase in importance (21.6 percentage points) is housing costs. Housing availability also shows the second-largest increase in its importance rating — up 10.9 percentage points to achieve a 68.4 percent rating. These results may seem surprising considering the precipitous housing price declines and market glut of the recent past. However, the increased importance given to these two quality-of-life factors may be in anticipation of a turnaround in the housing situation, with lower inventories and price increases in many markets.
Just like the Corporate Survey respondents, the majority of Consultants Survey respondents (78 percent) use site magazines like Area Development for information when helping their clients make location and expansion decisions. Three quarters of the consultants also utilize economic data aggregators, while two thirds also depend on financial publications.
More than half of the responding consultants claim to maintain their own site selection database. Nearly all of them (93 percent) have searched the Internet for site and facility planning information (only about 60 percent of those responding to the Corporate Survey claim to do that). When searching online, 90 percent of the consultants are looking for data on specific locations and contact information for economic development agencies. About 70 percent are also looking for listings of available sites and buildings on sites like FastFacility, and for industry related news on websites like AreaDevelopment.com.
More than 70 percent of those responding to our Consultants Survey say their clients put between one and five locations on their “short list” when seeking a new site; however, a quarter of the respondents say their clients have five to 10 locations on that list. About 60 percent say their clients visit up to five locations before making the final decision, with around the same percentage claiming a location decision is generally reached about six months to a year after a client engages their services.