Corporate Executive Survey Commentary: Clients Poised to Move Forward
Although policy uncertainty is delaying investment decisions, once projects are approved, companies are prepared to move forward.
It’s no surprise that labor is the most important factor in site selection. What’s interesting is that availability of skilled labor is the top priority. Perhaps that speaks to a more challenging skills gap today. While educational attainment has tripled in the U.S. in the past 30 years, there is concern that skills for which we’ve trained don't match the skills industrial clients need.
It's also interesting to look at some detailed parts of the survey. Public policy is clearly influencing decisions. For example, about half of respondents indicated the biggest factors holding back investment decisions are taxes, regulations, and uncertainty over economic policy. At the same time, the majority feel that the need for capacity and ability to access new markets is the top factor in facility expansion. So on one hand, companies are eager for growth and access to markets, but for half of respondents, policy uncertainty is effectively delaying investment decisions.
It also appears clients are concerned about timing and are cautious, but once projects are approved, they’re prepared to move forward. Indeed, about 80 percent of respondents expect their site selection process to take less than a year once initial contact is made with the locations of interest. For those experienced in site selection, if a client needs to make a significant decision and wants the process completed that quickly, there’s concern about a consultant's or economic developer’s ability to make sure that decision is cost and service appropriate.
Finally, there is good news. Regarding clients’ expectations for project work, the majority are bottom-line determined to move ahead. While there are concerns over policy, taxes and regulations, and availability of skilled labor, they have determined that decisions must be made and, for most, here in the United States. About half of clients for new manufacturing and distribution facilities will move forward within the next year or two, which bodes well for Industrial real estate.
In Focus: “Golden Age” of Spec Development
Area Development’s 17th Annual Shovel Awards Recognize State and Local Economic Development Efforts — First Two Platinum Shovels Awarded
The 2021 Top States for Doing Business Reflect Their Locational Advantages
In Focus: Demand for Industrial Land Surges
Explosive Growth of Life Sciences Sector Comes with Challenges
36th Annual Corporate Survey: Executives Focus on Labor, Energy, Shipping Costs
Using Robust Project Controls to Enhance Project Management