Business Facilities - April 2008 - (Page 11)

BUSINESS FACILITIES: What industries do you see staying and growing in the United States over the next few years, and why? HARTLEY POWELL: While I’m not in the business of making predictions, from my vantage point—based on open market data and what we see in the marketplace—industries such “ Today’s economy, more than ever, is pressuring companies to reduce costs and optimize their global footprint. ” —Hartley Powell as advanced manufacturing, pharmaceuticals, health care, and automotive should be among those continuing to lead the way in growth in the United States. We should expect these and other industries to continue to flourish because of our country’s market depth, strong talent base, advanced technology, and research facilities. BF: Can you talk about any U.S. location trends you see developing in 2008 and the next few years? Are certain states luring in businesses at an unusually high rate? If so, what are their secrets to success? POWELL: There are various key factors that continuously drive the location process. They typically include labor costs, availability of skilled labor, taxes, highway accessibility, and, of course, incentives. While all locations have to meet the basic business needs of the company, one particular trend we’ve seen lately is that companies are looking much more closely at incentives and zeroing in on when they can expect to realize their “true” benefits. As more states streamline and simplify their tax structures (e.g., single sales factor, exemptions, etc.), the value of the traditional tax credits has been significantly reduced. Therefore, companies are focusing on monetary or cash-based incentives for economic development, which can be more easily utilized and applied to a variety of company investment needs, unlike typical training and infrastructure grants. Our clients are attracted to the fact that cash incentives go immediately to their bottom lines, instead of waiting 10 to 15 years to utilize all of their earned tax credits. Another trend involves “onshoring” certain call center functions to improve customer service. In addition, companies are consolidating their data center functions to create efficiencies and cost savings. Today’s economy, more than ever, is pressuring companies to reduce costs and optimize their global footprint. Clearly, consolidation, mergers, and select acquisitions will continue to drive business trends. Also, it’s no secret that some U.S. companies are choosing to move south to take advantage of the milder climates, lower costs of living, favorable tax environments, and reasonable labor costs. Texas, in particular, is becoming one of the fastest growing job markets. The Southeastern states, particularly Alabama, Mississippi, and Georgia, with new automotive plants and suppliers, are also experiencing tremendous growth. BF: Which states have reputations for being the most businessfriendly? Are they deserved? Which states get unfairly overlooked? POWELL: That’s not an easy question to answer because every state has unique qualities and incentive programs that make them a good fit for specific business operations. For example, many of our servicerelated clients say they find that Oklahoma has become highly responsive to business needs in recent years. They find the state’s business costs to be reasonable and the state’s incentive structure helpful in offsetting short- and long-term business costs. In the Southeast, our clients in the automotive industry have found that Georgia, Mississippi, Alabama, Arkansas, Tennessee, North Carolina, and South Carolina offer the combination of facilities, personnel, and tax and incentive structures that they are looking for. BUSINESS FACILITIES 11 PHOTO CREDIT: JOHN DAUGHTERY OF LOF PRODUCTIONS

Table of Contents Feed for the Digital Edition of Business Facilities - April 2008

Business Facilities - April 2008 Contents First Word Snapshots Corporate Moves: Ohio Businesses On the Move Corporate Moves: Nebraska If You Build It, They Will Come A Tale of Two Industries Economic Transformation In the Islands Diversity: A New York State of Mind Growing in the Sun Key Kansas Industries Get a Boost How To Choose the Right Commercial Real Estate Broker Missouri Downtowns Dare to Dream Advertiser Index Ask the Expert

Business Facilities - April 2008

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