34th Annual Survey of Corporate Executives Commentary: Search for Skilled Labor to Operate — and Build — the Facility Continues
A shortage of skilled workers to not only operate a facility but also to build one is driving up construction and occupancy costs.
Q1 2020
As the economy continues to see sustained growth, the available labor force continues to drive most site selection decisions. The shrinking unemployment rate coupled with lack of vocational and technical school graduates entering the workforce has really put an even greater emphasis on the availability of skilled labor in the site selection process. Labor studies today are not only analyzing the availability of skilled labor to perform production activities inside the facility, but the labor is also analyzed to determine the quantity and quality of the carpenters, electricians, plumbers, and masons who will build the production facility.
Due to the labor market capacity constraints, I was initially surprised to see that corporate users were not putting available buildings higher in the rankings to reduce overall costs. The drop from 9th place to 12th place in the past year was shocking considering the rise of construction costs from 10th place to 5th place. As corporate occupiers struggle to find optimal locations that meet their cost objectives, the biggest hurdle they face is not only building or finding a building, but also managing the capital costs associated with development of the physical structure. Today’s manufacturing operations and floors are not the same as Henry Ford’s Model T line; thus, in some situations, it might be more cost-efficient to develop a new facility than to rehabilitate an out-of-date facility.
As we march into this new decade, it will be interesting to see what production facilities of the future will look like and cost. As corporate users will continue to have to work harder to attract and retain this limited skilled labor force, will the inside of the facility continue to cost more, warranting more new development or rehabilitation of existing industrial space?
Project Announcements
New Riff Distilling Plans Silver Grove, Kentucky, Barrel Storage Warehouse
06/24/2022
Kroger Establishes Aurora, Colorado, Fulfillment Center
06/24/2022
Americold Establishes Dunkirk, New York, Distribution Hub
06/24/2022
Dunn Utility Products Plans New Albany, Mississippi, Operations
06/24/2022
Carolina Precision Foods Plans Florence, South Carolina, Processing Plant
06/22/2022
Rockford Spring Plans Lewisburg, Tennessee, Manufacturing Complex
06/20/2022
Most Read
-
Area Development’s 17th Annual Shovel Awards Recognize State and Local Economic Development Efforts — First Two Platinum Shovels Awarded
Q2 2022
-
The 2021 Top States for Doing Business Reflect Their Locational Advantages
Q3 2021
-
36th Annual Corporate Survey: Executives Focus on Labor, Energy, Shipping Costs
Q1 2022
-
The Evolution of the Megasite
Q2 2022
-
Rail Gains Advantage Amidst Supply Chain Snarls
Q2 2022
-
Five Ways for Manufacturers to Manage Global Market Volatility
Q2 2022
-
Trends in Data Center Site Selection
Q2 2022