Consultants Forum Advertise
Subscribe
Area Development Magazine Current Issue

  • Free for qualified executives and consultants to industry

  • Receive quarterly issues of Area Development Magazine and special market report and directory issues

Subscribe Now
Renew

Area Development

Corporate Executive Survey Analysis: Importance of Available Buildings Drops Due to Glut of Inventory

Winter 2012
Not surprisingly, the responses to the Area Development Corporate Survey for 2011 convey continued uncertainty in what lies ahead. This sentiment was especially clear in the $64,000 survey question: "When will the economy improve significantly?" Eighty-five percent of the respondents in 2010 felt that this would happen in either 2012 or 2013. In 2011, 80 percent of the respondents moved those dates out to 2013 and 2014. Seems we are hoping that the economy gets better, but we are certainly not confident when that will occur.

When asked, "When do you expect to open new facilities?" the 2011 survey results show no significant change. Almost half (40+ percent) of the responses in 2011 were the same as in 2010, stating that they have no plans to open any new facilities. It appears the majority of companies are still looking for the sign that the economy is really getting better.

The site selection factors of highway accessibility and labor costs continue to hold the top-two rankings in importance. Proximity to major markets gained the most in importance, moving up eight spots to ninth place in the rankings. Availability of skilled labor moved up five spots to be tied for the number-two spot.

These factors all point to the increasing importance of the domestic market. This movement also reinforces the thought that "re-shoring" of manufacturing may be building momentum. Non-U.S. companies are positioning for the U.S. consumer market comeback, and considering distribution, assembly, and even manufacturing investments in the United States.

The two least important factors from the 2011 survey concern port and rail access, which were also the least important in 2010. Proximity to a technical college/training was rated as the third-least-important site selection consideration. I believe that economic development professionals have done a great job at being responsive and providing good training in the majority of areas. This, coupled with high unemployment, has led to the perception that job training and adequate numbers of applicants will be available in most places.

The severity of the recession has created a significant increase in available buildings in the market. This being the case, it is not surprising that the importance of available buildings dropped out of the top 10 to 15th place. Just having a vacant building today is not nearly as advantageous as it was just two years ago.

The reduction in profits over the last few years has also driven the importance of tax exemptions down five spots to eighth position. Not to be confused with state and local incentives (still fifth in importance), tax exemptions are not as valuable when you don't have profits and don't pay taxes.

It is unclear when the turnaround will arrive. When it does, companies are concerned about getting their trucks on the road and where they will find the best technical work force at a reasonable cost. Locations still have time to get ready for the opportunities that are coming.

Recent Project Announcements

Area Development Magazine Q2 2026

Current Issue | Q2 2026

Exclusive Research

Magazine

Issues
Area Development Magazine Q2 2026
Q2 2026

Receive quarterly issues of Area Development Magazine at no charge for qualified executives and consultants to industry.