24th Annual Corporate Survey Analysis by David Brandon
Dec/Jan 10
Whereas once availability, reliability, and quality led the way in site selection judgments, cost has now joined the vanguard of factors in a very prominent role. Circumstances such as intensifying global competition; the rise of China, India, and the ASEAN markets; political unrest; credit market difficulties; compressed times to market; and global recession have all combined to produce the importance that site selectors have accorded to cost factors in the 2009 Corporate Survey.
Commodity and specialty producers alike have felt the sting of global cost competition. Spikes in energy costs have permeated virtually every aspect of business operations and left an impression that will not fade so quickly as in the 1970s and 1980s. Dramatic increases in benefits costs, especially health insurance, have contributed rather publicly to our cost sensitivities and have highlighted the labor costs gaps that exist between the United States and industrializing nations.
It comes as little surprise then that, in this market, labor costs has risen to the top of the list of site selection factors. Nor is it a startling revelation that seven of the top 10 site selection factors in the 2009 Corporate Survey relate directly to a location's cost profile. Labor, taxes, energy, facilities, and transportation costs dominate the top-10 landscape.
Similarly, incentives have never, in my opinion, occupied so prominent a position in searches for new sites. Tax credits have largely lost their allure. Many site selectors view them as meaningless in their efforts to distinguish between competing locations. As noted near the top of the list, tax exemptions and related state and local incentives that generate "cash" with which to reduce capital expenditures and lower start-up costs are exerting powerful forces in site selection projects across the globe.
Overall, "cost" is top of mind for site selectors today. As the 2009 Corporate Survey recognizes, location costs, start-up costs, and operations costs combine to concentrate our attentions on locations with comparatively low and stable cost profiles.
Project Announcements
Bobcat Company Plans Rogers, Minnesota, Production Plant
05/18/2022
A2A Pharmaceutical Network Plans Scottsville, Kentucky, Headquarters
05/18/2022
Veloxint Relocates-Plans Triadelphia, West Virginia, Campus
05/18/2022
Virongy Biosciences Expands Prince William County, Virginia, Operations
05/18/2022
Cargill Establishes Caruthersville, Missouri, Soybean Processing Plant
05/18/2022
Perlick Corporation Upgrades Milwaukee, Wisconsin, Manufacturing Plant
05/18/2022
Most Read
-
The Evolution of the Megasite
Q2 2022
-
36th Annual Corporate Survey: Executives Focus on Labor, Energy, Shipping Costs
Q1 2022
-
The 2021 Top States for Doing Business Reflect Their Locational Advantages
Q3 2021
-
18th Annual Consultants Survey: Access to Major Markets and Skilled Labor Are Clients’ Primary Concerns
Q1 2022
-
2021 Gold & Silver Shovel Awards Recognize State and Local Economic Development Efforts
Q2 2021
-
Driving Into An Electric Vehicle Future
Q1 2022
-
Innovative and Collaborative Design Sets the Stage for Life Science Innovation
Q2 2022