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Respondents’ Plans
From the responses of our 2007 Corporate Survey participants, we can see how their site selection priorities have changed since last year. Now we need to find out their plans for new facilities, expansions, and relocations and how these might have changed over the last several years.

As we had expected, plans for new facilities are down (Figure 18). Only 20 percent of the 2007 survey respondents expect to open new facilities within one year, as compared to 25 percent of the 2006 survey respondents who had expected to do so, and 24 percent of the 2005 respondents with one-year new facility plans. The percentage of respondents with no plans at all for new facilities has increased from 40 percent in 2004 to 45 percent in 2005, 46 percent in 2006, and now 49 percent in 2007 — clearly a reflection of the economic downturn. However, perhaps the 2007 respondents expect this downturn to be short-lived because 25 percent of those with plans expect to open new facilities within the next two to three years. This is more than last year’s 23 percent who had new facility plans over the two-to-three-year range.

Of those with plans, 45 percent expect to open only one new facility (as compared with 47 percent last year) and 25 percent will open two (as compared with 34 percent last year). But 29 percent of the 2007 respondents have plans to open three or more new facilities (Slideshow, Figure 19). This represents an increase from last year, when just 19 percent of the respondents indicated they had plans to open three or more new facilities.

Interestingly, there’s been a slight shift in the location plans for new domestic facilities. Figure 20 shows that an equal percentage of new domestic facilities (14 percent) are planned by the 2007 Corporate Survey respondents for the South (Alabama, Florida, Georgia, Louisiana, and Mississippi) as for the Midwest (Illinois, Indiana, Michigan, Ohio, and Wisconsin). The West (California, Nevada, Oregon, and Washington) follows closely behind, expected to garner 13 percent of the new domestic facilities planned by the 2007 respondents. And the Middle Atlantic (Delaware, Maryland, New Jersey, New York, and Pennsylvania) is next in line, with 12 percent of the projects slated for this region. In 2006, survey respondents only slated 5 percent of their new domestic facilities for the West and 4 percent for the Middle Atlantic; the 2007 results show renewed interest in these two regions.

Half of the new domestic facilities will be manufacturing plants and another 30 percent of the projected facilities will house distribution/warehousing operations (Slideshow, Figure 21). In terms of employment, our 2007 Corporate Survey results indicate that more than 70 percent of the respondents expect to create fewer than 100 jobs at new facilities, with just a quarter creating between 100 and 499 new jobs (Slideshow, Figure 22).

Once again Asia will be the leading recipient of new foreign facilities, garnering 42 percent of these (Slideshow, Figure 23). This is, in fact, the same result recorded last year. Some 15 percent of the new foreign facilities planned by the 2007 respondents are slated for Mexico, 11 percent for Western Europe, and 7 percent for Canada. Only 6 percent will go to Eastern Europe, down by more than half from 13 percent that were slated for that region by the 2006 survey respondents. According to the Economist.com, last year foreign direct investment in Eastern Europe hit a peak, and a decline is forecast for 2007 and beyond. Apparently, Eastern Europe is failing to rise to Asia’s competitive challenge.