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Availability of skilled labor was considered “very important” or “important” by more of 2007’s survey respondents (88.7 percent) than by those responding to last year’s survey (85.1 percent), moving this factor from eighth to fourth place in the rankings. In fact, if we break this factor’s rating down, more than three-fifths of the survey respondents actually rated availability of skilled labor as “very important” (comparable to the “very important” rating given to highway accessibility), with less than 30 percent giving it just an “important” rating. Manufacturers have been saying for quite some time that the United States is facing an increasing shortage of skilled labor. The “Dream It. Do It.” campaign to attract and educate young people about the opportunities of advanced manufacturing was launched by the National Association of Manufacturers and its research, education, and work force arm — The Manufacturing Institute — in response to this concern.

The occupancy or construction costs factor also moved up in the rankings to fifth place, with an 88.2 percent rating, from seventh place in 2006, with an 85.5 percent rating. Again, we need to look more closely at this factor’s rating. If we do, we can see why it will always take a back seat to highway and labor concerns. While slightly more than half of the survey respondents rated occupancy or construction costs as “important,” only about a third rated this factor as “very important.”

While ranked lower than occupancy or construction costs, tax exemptions and state and local incentives actually scored higher in just the “very important” category. Corporate tax rate, state and local incentives, and tax exemptions ranked seventh, eighth, and tenth — in that order — for 2007, with combined “very important” and “important” ratings of 83.8 percent, 83.4 percent, and 82.8 percent, respectively. These ratings are below last year’s scores and are responsible for dropping these factors from their respective third, fourth, and sixth place rankings in 2006. It seems that tax and incentive issues are becoming more of a tiebreaker among locations that can satisfy the more important criteria of highway access and affordable, high-quality labor.

When it comes to incentives, nearly half of the 2007 Corporate Survey respondents think tax credits and exemptions are most important, while a third of the respondents also highly value grants, bonds, loans, and the like. More than half of the respondents also think other incentives like utility rate subsidies, infrastructure support, training, etc. are also significant inducements (Slideshow, Figure 13). About two-thirds of the survey respondents have received incentives in the past, and 80 percent of these recipients derived the expect benefits from the awarded incentives. Those not benefiting from the incentives cited tax and financial awards as having fallen short (Slideshow, Figures 14 and 15).

The available land factor jumped from 14th place in the rankings last year to sixth place this year, with an 85.4 percent combined “very important” and “important” rating, as compared with only 73.3 percent in 2006. This may be a reflection of the fact that the average occupancy rates at industrial properties nationwide are now in the low- to mid-90 percent range, up from the high-80s range just three years ago, according to experts at Wachovia Securities. And when it comes to overseas markets, real estate analysts say there is an acute shortage of available land. Therefore, with less existing space to occupy, companies looking to open new facilities or to expand need to look for available land.

In response to a question posed last year about available buildings, 68 percent of the 2006 survey respondents said available buildings were equally or more important than other factors. For 2007, we added availability of buildings to the ratings of survey factors. It is ranked 13th and considered “very important” or “important” by 79.3 percent of the 2007 Corporate Survey respondents. Again, this is probably a reflection of today’s high occupancy rates at industrial facilities.

Also showing a big jump in the rankings is environmental regulations. This factor moved from 15th place in 2006 (with a 68.9 percent rating) to ninth place this year, with an 83.2 percent rating. Company executives are realizing the implications of “green” or sustainable development to their companies’ image as well as profitability and responding with an elevated environmental consciousness.

In past surveys, we asked the respondents to rate availability of telecom services separately from availability of high-speed Internet access. Since telecom service is ubiquitous, we eliminated this factor from the 2007 ratings. We also replaced availability of high-speed Internet access with availability of advanced ICT (information and communications technology) services. This factor was ranked 11th by the 2007 Corporate Survey respondents with an 82.2 percent combined rating.

Another factor new to the 2007 Corporate Survey is expedited or fast-track permitting, which received a 71.5 combined “very important” or “important” rating and is ranked 16th. The ever-increasing pace of technology development has made speed-to-market critical for many companies. Hence, they need to get new facilities up and running as quickly as possible.

As in past years, the quality-of-life factors are ranked separately from the other site selection factors. Notably, low crime rate is the only quality-of-life factor that was rated “very important” or “important” by more than 70 percent of the 2007 respondents. As throughout our Corporate Survey history, low crime rate is the number-one ranked quality-of-life factor, with a 74.0 percent rating this year. It’s actually surprising that this factor is not rated even higher in importance this year because FBI reports indicate that crime — especially violent crime in urban areas — is on the rise. Also, as in past years, ratings of public schools, housing availability and housing costs, and health facilities were all rated and ranked higher than climate, cultural and recreational opportunities, and colleges and universities in area.

In addition to the site selection and quality-of-life factors noted in the rankings, many companies also consider whether there are businesses performing similar activities to theirs in the area of search. About two-thirds of the 2007 Corporate Survey respondents said this was a consideration, with more than 60 percent noting that the presence of such companies was very or somewhat important (Slideshow, Figure 16). Yet, only 19 percent of the respondents choose to meet with representatives of area companies when making site visits. Community representatives are sought out by more than half of the respondents, and 9 percent meet with representatives of area schools (Slideshow, Figure 17).