As the U.S. economy slowly recovers from the recession,
this year’s “Leading Locations” research reflects a
change in site selection behavior that matches what
we are seeing in the field. Companies are once again
moving outside their existing footprints, following a
long period of looking inward. The search for the ideal
combination of work force, facilities, and cost is
leading many to seek a happy medium — often
between the East and West coasts.
LEADING LOCATIONS FOR 2013 RESOURCES
Until recently, increased scrutiny on costs created a
very high “risk premium” for out-of-footprint sites.
Given capital constraints, the short-term savings of
staying within the existing footprint outweighed other
long-term considerations. If a manufacturing concern
planned to expand, for example, it would invest in an
existing site — even if an out-of-footprint location
offered a superior combination of attributes.
As evidenced by the Leading Locations research,
companies are continuing to migrate from higher-cost
to lower-cost locations, but are not restricting their
options to existing sites. Winning locations include
cities in the Heartland, as well as inland western and
eastern U.S. locations where real estate and labor
costs can be 10 to 30 percent lower than in the major
coastal cities. Of the top 50 Leading Location markets,
only 12 are coastal markets. The remainder are toward
the middle, a finding that aligns with what we are
seeing among our clients.
Top 50 cities such as Columbus, Ind.; Austin; Holland,
Mich.; and Oklahoma City, for instance, offer less
expensive land and facilities costs than the coasts, but
also provide different kinds of work force capabilities.
Thirty-eight of the top 50 are in the “flyover” states,
areas that many companies avoided in the past.
Midwest cities dominate the top 100 overall rankings,
capturing 24.25 percent of this group.
Work force considerations are also affecting some
location decisions. For instance, Omaha-Council Bluffs
ranks among the top 10 leading “Big Cities,” and
jumps dramatically up the overall rankings, from 133
last year to 21 this year. While Omaha may not have
been traditionally viewed as a large Tier 1 market in
the United States, major corporations such as PayPal,
TD Ameritrade, Yahoo, and Google have been making
substantial investments in Omaha for years.
The resurgence of manufacturing in the United States
has made work force development a key selection
factor for manufacturing concerns facing labor shortages.
States and cities that have aggressively invested
in work force development programs are winning the
competition for these companies.
In fact, the return of manufacturing jobs has led some
secondary markets out of the recession. While most of
the top 20 overall markets are characterized by
technology and “knowledge worker” companies or by
the energy boom, Columbus, Ind.; Holland-Grand
Haven, Mich.; and Dubuque, Iowa are among the cities
that are thriving largely because of major manufacturing
companies such as Cummins, Johnson Controls,
Herman Miller Furniture, Whirlpool, and others.
Leading Locations for 2013 Results