Area Development’s annual corporate survey ranks the site selection factors executives consider most important when deciding where to open new facilities.
Mericle Commercial Real Estate Services compared the most recent rankings in 2023 to an average of the rankings from 2016 through 2023. Several interesting shifts in preferences are worth noting.
Averaging first on the list of site selection factors is the availability of skilled labor. This score has fluctuated between the top three positions since 2016 and holds an average score of 2.0.
Following closely behind with an average score of 2.3 is the cost of labor. A brief shift in the importance of labor costs occurred in 2020, when the ranking dropped to 5 due to COVID-19. Since 2021, however, labor costs have been at or near the top of the list.
Highway access tied for 9th on the most recent survey, a surprise since it has ranked in the top three numerous times since 2016. Highway access has an average score of 4.3 since 2016, ranking it third overall in the last eight annual surveys.
With an average of 6.0, quality of life ranks 4th overall. Quality of life reached its peak on the list in 2022, when it ranked second. Next, corporate tax rates rank 5th with an average of 6.8. This placement has remained fairly steady over the past eight years.
The next factor is a recent addition to the Area Development survey. Energy costs were previously considered as part of energy availability, but was split into its own category in 2022. It currently holds an average of 7.3, ranking 6th overall. Energy availability and tax exemptions tie for 7th overall, each with an average of 7.5. Both factors have fluctuated significantly over the past eight years, largely due to changing economic conditions.
Following closely behind with an average score of 7.6 is occupancy and construction costs. This factor has followed a pattern in the past five years, ranking high in importance every other year.
The final factors in the overall top 10 since 2016 are state and local incentives, ranking 9th overall, with an average score of 9.6., and proximity to major markets, ranking 10th with an average score of 12.0.
Altogether, corporate executives were given 28 possible site selection factors in the survey. Manufacturing executives made up the biggest percentage of survey takers.