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Top States for Doing Business 2013 Consultant Commentary: Project Requirements Limit Site Searches

From availability of skilled labor to overall cost of doing business to global access, each project begins with a set of specific requirements that steer the decision toward a limited search area.

Daniel H. Levine, Principal, MetroCompare (Q3 / Summer 2013)
Each site selection engagement begins with the corporate client specifying project requirements that tend to limit search areas to a relatively few number of states. This year’s survey of consultants captures this dynamic more effectively than has sometimes been the case in years past.

Massachusetts and Michigan, for example, rank among this year’s leaders in availability of skilled labor. Similarly, Illinois and Indiana are in the top tier for distribution and logistics. Not surprisingly, the survey results rank the southern states as national leaders in the overall cost of doing business and for favorable regulatory climate. But strong though the South might be, does anybody really believe that any of these states deserves a higher ranking than does New York City or Los Angeles in terms of global access?

Similarly, it is not true that utility costs are always lower in the South as the results suggests, and some northern states (think South Dakota) have every bit as competitive a state tax climate as do any of the survey leaders. Nevertheless, Texas getting top honors as the best state for doing business should come as no surprise to anyone, whereas California ranking in the top ten is certainly an unexpected result.

One of the most interesting variables to watch during the upcoming year is the availability of basic industrial space. The availability of suitable existing industrial space has proven to be a critical limitation during several recent engagements. Similarly, as domestic energy production soars and natural gas prices decline, those states that pass these savings along to industrial users will find their competitive positions greatly enhanced.

Finally, a comment on incentives: It seems that the states that ranked well in the survey were those that not only offer significant incentives but tend to make their best programs available to most projects. In many other states that offer equally large incentive awards as do the survey leaders, it is much more of a hit or miss proposition as to whether your particular project will qualify for the most significant programs.

Top States For Doing Business 2013

  1. 1.Texas
  2. 2.Georgia
  3. 2.tSouth Carolina
  4. 4.Alabama
  5. 5.North Carolina
  6. 6.Louisiana
  7. 7.Tennessee
  8. 8.Florida
  9. 9.Mississippi
  10. 10.California
Full Rankings and Results Top State's Analysis
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