The location and expansion plans of our Corporate Survey respondents are not as robust as we had hoped, and their site selection priorities have been realigned, with facilities costs supplanting labor considerations.
With a growing U.S. economy and an “onshoring” trend fanning demand, the availability of skilled labor has become the #1 factor in site decisions.
The rise of “big data” in nearly every industry vertical has promoted continued importance of a robust information and communications technology (ICT) infrastructure as a site selection factor.
Now that we are in a clear growth mode, companies seeking industrial, distribution, R&D facilities, and office space increasingly are pressed to find existing buildings that will accommodate their needs.
The importance of state and local incentives smashed up through the ranks of site selection factors to #8 in Area Development’s most recent Corporate Survey from #13 a year earlier. And, with big money at stake, states are more careful to make sure they are getting what they pay for.
A state’s corporate tax rate is usually a bedrock indicator of its business-friendliness and a simple but substantial number that has a huge long-haul impact on the financial performance of a new plant or other facility.
The cost and availability of energy has been dropping in importance as a site selection factor, ranking #10 in the 2013 Area Development Corporate Survey, down from its #6 position a year earlier. The drop seems to reflect a persistent weakness in natural gas prices as well as a steady rise in alternative-energy capabilities across the country.
Although labor costs seem to trump all other factors, they must be analyzed as part of overall operating expenses. This is the last in a series of articles examining the top-10 site selection factors as decided by the respondents to AD's Q1 Corporate Executive Survey.
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