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2016 Top States for Doing Business Commentary: “Sunshine States” Continue to Lead the Pack

In nine of the top-10 scoring states, weather conditions allow construction 365 days a year, and local governments in the South have also been aggressive in incorporating incentives into every deal.

Q3 2016
Oftentimes, it all boils down to the basics. In Area Development’s 30th Annual Corporate Survey, 83.7 percent of the executives responded that available buildings were either important (48 percent) or very important (35.7 percent) in making a location decision. Available buildings, along with available land, occupancy/construction costs, and expedited government permitting, were all rated as important in making a location decision by more than 70 percent of respondents.

That is why it is no surprise that the “sunshine states” continue to lead the pack. There is a high probability that in nine of the top 10 states (Northern Indiana being the only exception) developers and users can build 365 days of the year. Winter weather conditions typically do not halt construction, and the permitting processes are ranked the most favorable in the country.

According to research from Cushman & Wakefield, as of Q2 2016, there are 4.0 billion square feet of industrial inventory in the South region (6.9 percent vacancy), with 83.1 million square feet under construction and 38.3 million square feet delivered. Still, the national commercial real estate market continues to lack high-quality product, and states and communities that can deliver a building quickly — or get one out of the ground for the lowest cost — are going to win the businesses.

Fortunately, some states afford their local units of government great flexibility when it comes to incentives, enabling them to aggressively attract new development. In the South, local governments traditionally have been aggressive in incorporating incentives into every deal. They find real above-the-line costs that can ease the pain for users and developers, such as property tax abatements, sales tax abatements, site preparation grants, and free land. Additionally, power companies play a bigger role in economic development down South — offering discounted power and sometimes even infrastructure credits. Because at the end of the day, if the facilities and labor are present and costs are competitive, businesses will come.

TOP STATES FOR DOING BUSINESS 2016

  1. 1.Georgia
  2. 2.South Carolina
  3. 3.Texas
  4. 4.Tennessee
  5. 5.Louisiana
  6. 6.Alabama
  7. 7.Florida
  8. 8.Indiana
  9. 9.North Carolina
  10. 10.Mississippi
  11. 11.Ohio
  12. 12.Nevada
  13. 13.California
  14. 14.Kentucky
  15. 15.Arizona
  16. 16.Arkansas
  17. 17.Oklahoma
  18. 18.Michigan
  19. 19.New York
  20. 20.South Dakota

Individual Categories

Overall Cost of Doing Business

  1. 1.Texas
  2. 2.South Carolina
  3. 3.Tennessee
  4. 4.Florida
  5. 5.Georgia
  6. 6.Alabama
  7. 6.tNorth Carolina
  8. 8.Mississippi
  9. 9.Oklahoma
  10. 10.Indiana

Corporate Tax Environment

  1. 1.Florida
  2. 2.Texas
  3. 2.tNevada
  4. 4.South Dakota
  5. 5.Wyoming
  6. 6.Georgia
  7. 6.tAlabama
  8. 6.tIndiana
  9. 9.Tennessee
  10. 10.South Carolina
  11. 10.tMississippi
  12. 10.tUtah

Business Incentives Programs

  1. 1.South Carolina
  2. 2.Louisiana
  3. 3.Georgia
  4. 4.Tennessee
  5. 5.Texas
  6. 6.Alabama
  7. 7.New Jersey
  8. 8.Mississippi
  9. 9.Florida
  10. 9.tIndiana

Access to Capital & Project Funding

  1. 1.Texas
  2. 2.California
  3. 3.New York
  4. 4.Georgia
  5. 5.Florida
  6. 6.Tennessee
  7. 7.North Carolina
  8. 8.Colorado
  9. 8.tMassachusetts
  10. 10.Ohio
  11. 10.tIllinois

Competitive Labor Environment

  1. 1.Texas
  2. 2.Georgia
  3. 3.North Carolina
  4. 4.South Carolina
  5. 5.Alabama
  6. 6.Tennessee
  7. 7.Florida
  8. 7.tMississippi
  9. 9.Idaho
  10. 9.tUtah

Leading Work Force Development Programs

  1. 1.Georgia
  2. 2.Louisiana
  3. 3.South Carolina
  4. 4.Tennessee
  5. 5.Alabama
  6. 6.Florida
  7. 7.North Carolina
  8. 8.Indiana
  9. 8.tMichigan
  10. 8.tCalifornia

Cooperative & ResponsiveState Government

  1. 1.Georgia
  2. 2.South Carolina
  3. 3.Louisiana
  4. 4.Tennessee
  5. 4.tFlorida
  6. 6.Ohio
  7. 7.Indiana
  8. 8.Mississippi
  9. 8.tAlabama
  10. 10.North Carolina

Favorable Regulatory Environment

  1. 1.Texas
  2. 2.Georgia
  3. 3.South Carolina
  4. 4.Tennessee
  5. 5.Louisiana
  6. 6.Alabama
  7. 7.Florida
  8. 8.Indiana
  9. 9.Arizona
  10. 10.Mississippi

Speed of Permitting

  1. 1.South Carolina
  2. 2.Georgia
  3. 3.Alabama
  4. 4.Tennessee
  5. 5.Texas
  6. 6.Indiana
  7. 7.Louisiana
  8. 8.Mississippi
  9. 9.Florida
  10. 10.Kentucky

Most Improved Economic Development Policies

  1. 1.Indiana
  2. 1.tOhio
  3. 3.South Carolina
  4. 4.Georgia
  5. 5.Michigan
  6. 6.Alabama
  7. 7.Tennessee
  8. 8.New Mexico
  9. 9.North Carolina
  10. 9.tArizona
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