Area Development
{{RELATEDLINKS}}Industrial site selection is the most complex of all site locations to undertake successfully. Site selection requires finding the necessary labor skills, but over the past two decades logistics associated with manufacturing and distribution have played an increasingly larger role as shifting customer demand interfaced with a company’s existing and expanding supply chain footprint can be either positive or negative cost and efficiency factors for a corporation. This is due to the fact that for manufacturing and warehouse distribution investments, logistics should drive location instead of location driving logistics — otherwise corporations are not minimizing costs and maximizing efficiencies.

Over the past 15 years, Area Development’s Annual Corporate Surveys have typically shown that highway access has been the number-one site selection factor overall, with labor being number two. This was true for 2000, 2005, and 2010. However, the current 2015 Corporate Survey shows the availability of skilled labor as the number-one factor, with highway access slipping to the number-two spot. While I found this to be very interesting, I thought it to be a bit contrary to what I have been experiencing as a corporate site selector, at least for manufacturing and warehouse distribution investments.

I took a look back and analyzed the makeup of prior respondent pools since 2000. In the year 2000, the respondent pool was comprised of 77 percent of manufacturing companies. In 2005, the makeup was 80 percent manufacturers. This figure dropped to just 66 percent for the 2010 survey. However, the current 2015 survey respondent pool is made up of only 35 percent manufacturers. This shows a respondent pool that is largely non-manufacturing in nature and hence not reflecting the highway access aspect as much as the surveys of the past. It is still my belief that for manufacturing and warehouse distribution, highway access remains the top factor.