1

When it comes to the industries the responding consultants are working with, more than 60 percent are helping those in the automotive/battery as well as consumer products sectors; nearly 60 percent work with food processing companies too; and around 40 percent with energy and life sciences/biotech firms. More than half the respondents say they work with very large firms in terms of employment, i.e., 5,000 or more employees, while more than 60 percent work with companies having anywhere from 100 to 4,999 workers.

Nearly three quarters of the respondents to our Consultants Survey say their clients who ask them to perform a location search have already narrowed down the geographic area in which they wish to locate, with two thirds gathering preliminary data. Meanwhile, half also say many of their clients have not actively initiated a site search when they engage their services.

Three quarters of the responding consultants say recent government legislation, i.e., the CHIPS and Science Act and Inflation Reduction Act, will greatly or moderately affect their clients’ expansion and investment plans. A similar percentage also say their clients’ investment and expansion plans will be greatly or moderately affected by current economic conditions, i.e., inflation, a potential recession, etc. These economic pressures are cited by more than half of the respondents as most affecting client plans, while a third cite workforce availability as having the most effect. The respondents to our Corporate Survey actually agree with the consultants on what is going to most affect their location/expansion plans.

Three quarters of the responding consultants say recent government legislation will greatly or moderately affect their clients’ expansion and investment plans. What Are Their Clients’ Plans?
Another point on which the Consultants Survey respondents and Corporate Survey respondents agree is where domestic location and expansion projects will be located.

The respondents to our 19th Annual Consultants Survey say most of their clients’ projects are slated for the southern region of the U.S. — 16 percent of the projects for the South and the same percentage for the South Atlantic and 15 percent for the Southwest, with 13 percent of the total projects going to the Midwest.

The timeline for these new location or expansion projects is between six and 12 months, say 67 percent of the responding consultants, with 60 percent also saying some projects take a year to 18 months. More than a third of the respondents to the Consultants Survey say some projects take longer than 18 months. Interestingly, 80 percent of the responding consultants say they are currently working with international companies pursuing foreign direct investment into the United States.

Site Selection Priorities
Also, as in years past, the consultants give the site selection factors much higher importance rankings than did the Corporate Survey respondents. Whereas none of the corporate respondents give the factors a combined “very important” or “important” rating of more than 89.1 percent, the responding consultants give 11 of the 31 factors a combined importance rating of more than 90 percent.

Ranked #1 is availability of skilled labor, tied for #1 with energy availability, both factors receiving a combined importance rating of 98.3 percent. It seems like the tight labor market is top of mind for the consultants, as is the global energy shortage exacerbated by the war in Ukraine.

The costs associated with these factors are right up there in the ratings and rankings. Labor costs ranks third (up from 13th in the previous year’s Consultants Survey), considered “very important” or “important” by 96.6 percent of the respondents to the 19th Annual Consultants Survey, up more than 10 percentage points in the ratings from the previous year’s survey. And, energy costs lands in the #6 spot with a combined importance rating of 96.5 percent.

The respondents to our Consultants Survey rank availability of skilled labor and energy availability as the most important location factors. Tied for the #3 spot with labor costs are proximity to major markets, which was ranked #1 in the previous year’s Consultants Survey, and state and local incentives. As the consultants help companies navigate the incentives landscape and comply with incentives’ requirements, it’s no surprise this factor receives such a high ranking.

Related to proximity to major markets is highway accessibility and proximity to suppliers. These latter two factors both rank seventh as does available land; all three factors are considered “very important” or “important” by 94.9 percent of the responding consultants. With industrial vacancy rates reaching historic lows in 2022, it’s surprising that available buildings dropped six places to #16 in the rankings, although it still has a combined importance rating of 84.5 percent.

The last two site selection factors achieving a combined importance rating of more than 90 percent are expedited or “fast-track” permitting and construction costs. Those looking to establish new facilities are still feeling the effects of supply chain shortages drawing out timetables and inflating costs.

Although environmental regulations didn’t jump much in the rankings (it’s in a tie for 14th place), its combined importance rating increased more than 10 percentage points to 87.7 percent. In fact, 50 percent of those responding to our 19th Annual Consultants Survey rate environmental, social, and governance or ESG initiatives as “very important” or “important.”

Given the importance of developing a pipeline of skilled labor, it’s not surprising that technical schools and training programs are both considered “very important” or “important” by more than 80 percent of the respondents to our Consultants Survey.

What is surprising is the difference in the rating and ranking of quality of life between the Corporate and Consultants surveys. Whereas the Corporate Survey respondents rank this factor second, with an 87.1 percent combined importance rating, only 72.4 of the responding consultants give it a similar rating and place quality of life in the #25 spot among the site selection factors. The respondents to our Consultants Survey feel that quality of life is subordinate to operational factors.

Just as the ICT/broadband factor jumped more than 40 percentage points in its combined importance rating in the Corporate Survey, it had a large increase in its combined importance rating in the 19th Annual Consultants Survey — more than 30 percentage points, though it still ranked only in 23rd place among the factors. The continuation of the remote work trend is reflected in the increased importance of this factor.

The respondents’ comments on the ratings and rankings of the site selection factors by their corporate counterparts are included within the 37th Annual Corporate Survey and provide further insight on what they feel companies’ priorities should be.