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Of the new facilities planned by the 2007 survey respondents for Asia, twice as many will go to China as India (Slideshow, Figure 24). And more than a fifth are planned for other Asian nations such as Singapore and Malaysia. Nearly half of the new foreign facilities planned by the respondents will be manufacturing operations, and about a third will be warehouse/distribution facilities (Slideshow, Figure 25).

Our survey results indicate that more jobs are going to be created by new foreign facilities than by new domestic ones. Less than half of the new foreign facilities are expected to create fewer than 100 jobs, with 20 percent responsible for the creation of 500+ jobs (Slideshow, Figure 26). Importantly, more of these jobs (42 percent) will be high-skilled manufacturing jobs than low-skilled manufacturing jobs (35 percent) (Slideshow, Figure 27). In confirmation of manufacturers’ concerns about a shortage of skilled labor, survey results indicate that it’s not just low-skilled jobs going offshore.

Nevertheless, the 2007 Corporate Survey respondents don’t expect all to run smoothly at new foreign facilities. Nearly two-thirds indicated they are worried about legal as well as regulatory problems offshore, while more than 70 percent said social/cultural barriers are a significant problem (Slideshow, Figure 28).

The economic downturn is also reflected in the number of respondents who have expansion plans. More than half of the 2007 Corporate Survey respondents claim to have no plans to expand facilities, compared with 46 percent who said they had no plans in 2006, 45 percent who had no expansion plans in 2005, and only 41 percent with no expansion plans in 2004. Of the 47 percent who do have expansion plans, 22 percent said they would expand facilities in one year and 17 percent within two years (Slideshow, Figure 29). Job creation at expanded facilities will also be meager. More than 80 percent of the respondents said fewer than 100 jobs would be created by their expansions (Slideshow, Figure 30).

Additionally, the 2007 Corporate Survey respondents are not planning as many relocations as past years’ survey respondents. Only 23 percent expect to relocate a domestic facility within the next three years (Slideshow, Figure 31).  In 2006, 36 percent of the survey respondents had one-to-three-year relocation plans. A third of this year’s respondents cited the need to lower operating/occupancy costs as the primary reason for relocating, and a quarter said it is because of high labor costs at their present location (Slideshow, Figure 32). The majority of those planning to relocate a facility (72 percent) indicated that they would move the operation to another U.S. destination (Slideshow, Figure 33).

Respondents’ Sources of Information
The final portion of our survey reveals how our corporate readers get the information on which they base their location decisions. More than half of the 2007 respondents said they use the Internet for obtaining this information. About half also said they use site magazines like Area Development. These are their primary information sources for site and facility planning. Only about a quarter claim to use general business or financial publications as well (Slideshow, Figure 34).

Nearly 90 percent of the 2007 Corporate Survey respondents who use the Internet for help with their location decisions obtained specific location website addresses from general search engines like Google or Yahoo. About two-thirds of the respondents said they found these addresses in site magazines like Area Development. Similar percentages of respondents found economic development websites (81 percent) and online site magazines like Area Development Online (65 percent) to be among the most useful online tools (Slideshow, Figures 35 and 36).

When asked if they also received help with site selection decisions from consultants, slightly more than half of the survey respondents said no. Of those respondents who do use the services of consultants, nearly all (89 percent) said the consultants perform location studies for them; about half said consultants help with incentives negotiation; and 45 percent claim they even let the consultants make the final site selection decision for them (Slideshow, Figures 37 and 38).

Prognostications
The 2007 Corporate Survey results appear to reflect the prevailing pessimistic mood of many business leaders and are aligned with other economic forecasts. For instance, in late November, the Conference Board said its index of leading economic indicators had fallen in both September and October and that consumer confidence had weakened as well. The board noted that tightening of credit markets was causing both consumers and businesses to cut spending. Only 24 percent of business executives responding to The Conference Board’s CEO Confidence Survey said their companies had increased capital spending since January 2007, while 13 percent had scaled back plans, primarily as a result of a decline in sales volume.

And Chief Executive magazine’s CEO Confidence Index fell to 127.5 in October, the lowest level since July 2003. Nevertheless, 75 percent of the CEOs polled by the magazine felt the likelihood of a recession in the next 18 months was less than 50 percent. In fact, 42 percent of those responding to the poll believed the chances of recession were less than 25 percent.

The Federal Reserve Board also expects economic growth to slow sharply in 2008. Its forecast for 2008 GDP growth ranges from 1.6 percent to 2.6 percent (down from the 2.5 percent to 3 percent growth rate predicted earlier this year). Those polled by The Business Roundtable in November are also assuming 2.1 percent economic growth for 2008. And we can probably find more surveys, polls, and prognostications by members of respected economic groups to corroborate our findings. Obviously the slowdown in location and expansion plans revealed by our 2007 Corporate Survey results was to be expected. Now we can only hope that when we attempt to analyze next year ’s survey results, it’s not déjà vu all over again.