Economic Update: May 2023

May 07, 2023 | Written by: Caitlin Moore

Each year, Area Development magazine polls its corporate readers to find out their plans for the coming year. Specifically, the survey asks about new facilities. A few of the respondents are independent site consultants, some are corporate real estate and facilities managers, most are C-suite decision-makers. There’s a chart at the end of this article.

About a third (29%) of respondents will build a new US facility. Nearly 33% said they would expand where they are currently located. The biggest percentage (37%) are looking in the southeast or southwest US. Only 7% are looking in Canada, 4% in Mexico.

Here are some notable changes in this year’s rankings of site selection factors (compiled in Q1 2023) versus last year.

  • Labor cost is still the Number 1 factor in a relocation decision, ranked first by 89.1% although surprisingly, not as important as last year (96.4%).
  • Quality of Life jumped to the #2 spot from *11th place last year. Corporate executives know today’s workers want good work/life balance. Our local assets (Kiwanis Park, natural settings opportunities, the Youth Sports Complex, the library, vibrant downtown)…all of those things…are very important in attracting talented people.
  • Skilled Labor is number 3. So, the top three spots show dramatically that finding and keeping talented workers at reasonable costs is the single biggest combined factor influencing almost every corporate relocation.
  • Energy availability and costs were separated this year…availability is #4, cost is #8.
  • Construction costs moved up to 5th from *11th .
  • T./Broadband jumped a lot in importance from 26th to 6th … Artificial intelligence and “smart factories” are a real thing…plus, many workers are still working from home and need that robust connectivity to their workplace.

Nothing in this year’s survey surprised us. We’ve been hearing the labor supply and cost theme for 2 years. The good news is that we have worked hard to have the community assets to attract new residents to take these new jobs…if we can build housing for them. And, for our viewpoint right now, 4 months into the year, new residential construction (apartments and single family homes) will be a bright spot for our local economy in 2023!

*QoL and Const. costs were tied for 11th place last year.


Bob Joyce

Senior Director