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Area Development - Site Selection, Facility Planning and Workforce Development

Which Countries Have Lowest Business Costs?

According to the 2016 Competitive Alternatives report from KPMG, the United States has dropped to 10th place for lowest business costs — the only time the U.S. has ever placed this low in Competitive Alternatives rankings.

Q2 2016
According to the 2016 Competitive Alternatives report from KPMG, the United States has dropped to 10th place for lowest business costs — the only time the U.S. has ever placed this low in Competitive Alternatives rankings. This is a result of the surging value of the U.S. dollar in 2015, which has greatly impacted the global business landscape, significantly constraining U.S. competitiveness. According to the report, the high value of the U.S. dollar drives down the cost of doing business in all other countries, when measured in U.S. dollar terms. The U.S. now stands out as a high-cost business location relative to its peers.

Two other NAFTA members rank first and second. As the only high-growth (emerging) country included in the study, Mexico represents the lowest-cost country examined. In 2016, Mexico’s business cost advantage over the U.S. stands at 22.5 percent, higher than at any point in this decade. And Canada maintains its second place rank among the 10 countries, with business costs 14.6 percent below the U.S.

Area Development’s ranking of the site selection factors from its 2015 Annual Corporate Survey is also highlighted in the Competitive Alternatives report. It’s noted that nearly half of the ranked site selection factors have direct implications on the cost of business, including labor costs, corporate tax rates as well as tax exemptions and state and local incentives, available land and buildings, energy availability and costs, and inbound/outbound shipping costs.
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