23rd Annual Corporate Survey Analysis by Gary Yates
Dec/Jan 09
![Figure 9.
When asked about how the downturn in the U.S. economy (up until late summer 2008) had affected their facility plans, just 24 percent of the respondents said their new facility plans had been put on hold, while 22 percent said they were still planning to open new facilities.](https://cdn9.areadevelopment.com/article_images/id99985_corporateanalysisbig.gif)
Well, I've got good news and I've got bad news. The bad news is that planned new facilities and planned expansions are down for this year. The good news is that both planned new facilities and planned expansions are reportedly higher for next year. While many of the respondents say the economy has affected growth plans, 62 percent have new facilities planned in one to four years (and that's up from 51 percent in 2007, 54 percent in 2006, and 55 percent in 2005). In the world of economic development and site selection consulting, this translates to a lot of due diligence work now.but with delayed gratification.
While delayed growth appears optimistic, the volatility of the marketplace could have a greater impact than respondents indicated. Only 32 percent of respondents said the tightening credit market would affect their facility plans. However, recent events - such as the Big Three automakers asking Congress for $34 billion, and the inability of many businesses to get loans just to cover the cash flow cycle - will definitely impact optimism. Look for better flowing credit as the leading indicator of facility expansions and new facility developments.
It is clear that cost savings will be driving all near-future site selections. Four of the top-five site selection factors are directly related to cost. The number-one factor, highway accessibility, could arguably be a cost component. Tax exemptions have shot from tenth place to fourth, despite 50 percent of respondents saying tax incentives have fallen short. This is an opportunity for communities.in this time of high unemployment, job creation opportunities should be viewed as a win for the community, and the tax breaks to the new companies are a win for them. In 2009, expect many companies to be shopping for reduced cost locations in preparation for an optimistic economic market.
Project Announcements
PEAK Precision Manufacturing Plans Bowling Green, Kentucky, Operations
07/26/2024
Italy-Based Sipcam Agro USA Upgrades Wayne County, Mississippi, Operations
07/26/2024
Cleveland-Cliffs Plans Weirton, West Virginia, Operations
07/26/2024
IDEXX Laboratories Plans Wilson, North Carolina, Production Operations
07/26/2024
Germany-Based Ritz Instrument Transformers Plans Waynesboro, Georgia, Operations
07/26/2024
AirJoule Plans Newark-Wilmington, Delaware, Operations
07/26/2024
Most Read
-
19th Annual Area Development Gold and Silver Shovel Awards
Q2 2024
-
2023's Leading Metro Locations: Hotspots of Economic Growth
Q4 2023
-
2023 Top States for Doing Business Meet the Needs of Site Selectors
Q3 2023
-
The CHIPS and Science Act will bring jobs back to the United States
Q2 2024
-
The Bring Your Own Energy (BYOE) Party Is Starting
Q2 2024
-
2023 Top States Commentary: Top-Ranked States Have What It Takes to Win Mega Projects
Q3 2023
-
How to Overcome NIMBYism in Data Centers
Q2 2024