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Corporate Executive Survey Commentary: Results Mirror General Market Trends

The Corporate Survey respondents show little confidence in a speedy economic recovery and a limited appetite to commit to large capital-intensive projects, closely mirroring the market trends seen by Christopher B. Schastok, vice president at Jones Lang LaSalle.

Q1 / Winter 2013
27th Annual Survey of Corporate Executives and 9th Annual Survey of Consultants

Brett HunsakerSurvey Results Point to a "Positive Hold"
Brett Hunsaker, executive vice president and regional managing director at Newmark Grubb Knight Frank
Bill LuttrellEmergence of Big Data Affects Corporate Survey Respondents' Priorities
Bill Luttrell, senior locations strategist at Werner Enterprises
Ed McCallumA Lackluster Recovery
Ed McCallum, senior principal at McCallum Sweeney Consulting
Christopher B. SchastokCorporate Survey Results Mirror General Market Trends
Christopher B. Schastok, vice president at Jones Lang LaSalleg
Andrew ShapiroIncentives Are Still Important
Andrew Shapiro, managing director at Biggins Lacy Shapiro & Company
Thomas StringerCorporate Survey Reflects the New Economic Normal
Thomas Stringer, Business Advisory Services, Ryan & Company
The results of Area Development’s survey closely mirror the trends seen in today’s market: the southern part of the United States continues to not only heavily recruit new projects by offering creative economic incentives, a strong work force, and low tax/regulations, but it is also winning a majority of these new projects as 50 percent of new facilities are landing in the South (South Atlantic, Mid-South, South, and Southwest combined) according to those responding to the Corporate Survey.

Thus, it is also of little surprise that new manufacturing facilities comprised more than a quarter of new domestic facilities, as clients continue to be focused on overall operating costs and increased productivity. Furthermore, as it pertains specifically to locating new manufacturing operations, many clients are seeking business-friendly and stable environments that are almost exclusively right-to-work, which provides a tremendous advantage for the Southern States. Interestingly there have been some recent high-profile successes by Midwest states to pass right-to-work legislation, but it is too early to say what the effect will be on future projects, although many companies have been carefully monitoring these changes.

The data also clearly highlights the overall impact that the economy is having on growth, with many respondents showing little confidence in a speedy economic recovery and a limited appetite to commit to large capital-intensive projects; however, there have been some notable exceptions, specifically in the high-tech and oil and gas industry. As a result, assistance offered in the form of discretionary economic incentives, especially tax credits and grants, will continue to play a role in helping to offset costs. Decision-makers will be looking for relevant tax credit programs that offer utility and are not simply prescriptive. Undoubtedly the competition for new projects will only heat up, and states with flexible incentive programs will be in the best position to succeed.

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