Of those with expansion plans, number
of new jobs to be created:
Fewer than 20 — 42%
20-49 — 26%
50-99 — 12%
100-499 — 14%
500-999 — 5%
1,000 or more — 1%
Figure 21
Expect to relocate a domestic facility within:
2008 8%11% 5%2%
74%
2007 8%10%5%4%
74%
2006 11%11% 14% 4% 60%
0 20 40 60 80 100
1 Year 2 Years 3 Years 4 Years or more No plans
Figure 22
Primary reasons of those planning a relocation:
Proximity to suppliers/markets served — 37%
Labor costs — 23%
Labor availability — 11%
Operating/occupancy costs — 54%
Need for improved business climate — 17%
Quality-of-life concerns — 3%
Other — 29%
0 10 20 30 40 50
Figure 23
Offshoring or Returning?
Do you expect to relocate a domestic
facility to overseas?
60
Yes — 4%
No — 96%
Do you expect to relocate a
foreign facility back to the U.S.?
Yes — 4%
No — 96%
in lower occupancy costs. Nonetheless, those shrinking
profit margins previously referred to are forcing companies
to look for savings wherever they can. (See the article on
this factor in this issue of Area Development.)
Another way for companies to save money is through
tax exemptions. This factor holds the fourth place spot this
year, receiving an 88.6 percent rating in importance from
the survey respondents — up from tenth place in 2007
when it was rated “very important” or “important” by just
82.8 percent of the respondents.
Two related factors — state and local incentives and
corporate tax rate — also grew in importance ratings, although
they did not jump ahead in the rankings. The former
ranked seventh with an 87.2 percent rating, and the latter
followed in eighth place with an 85.3 percent rating.
Reduced tax revenues brought about by the current recession will obviously curtail state and local governments’ ability to offer generous incentive packages or tax exemptions,
but these factors will always rank high with site selectors.
When asked specifically about types of incentives, more
than half of the Corporate Survey respondents said tax
incentives were most important, while nearly half also cited
the importance of incentives such as free land, utility rate
subsidies, infrastructure and training support, etc. (Figure
27). In fact, the training programs factor advanced 5. 7 percentage points in this year’s ranking, receiving a 62.3 percent combined “very important” and “important” rating.
More than half of the respondents indicated their companies had received some type of incentives in the past,
and nearly two thirds of these recipients were satisfied with
their benefits. Of those who felt the incentives had fallen
short, half claimed that the tax incentives expected had
failed to materialize (Figures 28, 29, 30). Perhaps these
firms had not met their end of the deal with respect to
promised investment or job creation commitments in
exchange for the incentives.
