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30th Annual Survey of Corporate Executives: Cautious Optimism Reflected

New facility and expansion plans are up slightly on a year-over-year basis, although finding skilled labor is once again top of mind. Nearly half the respondents believe the U.S. economy is on a continuous growth track.

Q1 2016
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Location Decision Process
Ninety percent of our 30th Annual Corporate Survey respondents get their site selection information from magazines like Area Development. Nearly 60 percent also search online sources (e.g., AreaDevelopment.com) for this type of information, with about three quarters looking for economic data on specific locations, and half looking for listings of available sites and buildings.

More than half of these respondents begin the information-gathering process one to two years before making a location decision. Three quarters make contact with the locations of interest within one to six months of beginning their initial search.

About 90 percent say they put between one and five locations on their “short list.” A third only visit one or two of the location finalists, but more than half visit up to five locations before making their final decision. About 80 percent say the final site selection decision is made within three months to one year of initial contact.

Fewer than half (43 percent) use outside location or business consultants when site selecting. Of those that do, about half say they are providing feasibility studies, location/comparative analyses, incentives negotiations/management, and help with the real estate transaction, as well making the final location decision.
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30th Annual Corporate Survey Results

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Total number of new jobs to be created by domestic expansion(s).
Year-Over-Year Comparison
The conclusion’s made in our prior year’s survey — i.e., that our 30th Annual Corporate Survey would reflect increased new facility and expansion activity — appear to hold true. Economists also are predicting U.S. GDP growth of 2.4 percent for 2016, according to The Conference Board, propelled by growth in employment and wages.

And according to Deloitte’s Q4/2015 CFO SignalsTM Report, there is considerable optimism in CFOs’ expectations and plans for 2016. Growing existing businesses and getting more efficient are the CFOs’ dominant focuses, but new markets are very significant for some industries, says the report. The CFOs say they will increase their investment in North American markets, with little additional focus on Europe or China.
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The location decision process.
As this is an election year, there’s been much talk about what’s needed to help businesses and the nation as a whole grow even faster and further. Commenting in The Wall Street Journal, Glenn Hubbard, dean of Columbia Business School, and Kevin Warsh, a former Federal Reserve governor and a distinguished visiting fellow at Stanford University’s Hoover Institution, noted the next president must be committed to policies that increase the nation’s economic potential, including long-term tax and regulatory reform, as well as trade policies that continue to open global markets and educational policies that empower schools to put students’ skills over other interests. They don’t support the theory of today’s economic growth being the “new normal.” They believe that with the right policies in place, the U.S. can return to significantly higher rates of growth.

Our next Corporate Survey will be conducted at year’s end, with a new president elected. The results will, no doubt, reflect our corporate executive readers’ confidence in the president-elect’s ability to help their businesses prosper and grow.
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