by Ceci Grover, on Nov 18, 2024 9:53:00 AM
Site Selection Group, a full-service location advisory, economic incentives, and real estate services firm, helps manufacturing companies find the optimal location by employing an objective top-down approach to site selection. This top-down selection process requires the application of innovative analyses and filters until the most competitive locations are identified.
One of the most critical proprietary tools used by Site Selection Group is GeoCision®, a weighted model that can score and rank candidate geographies based on pertinent site selection variables.
Ranking states by competitiveness for manufacturing investment
Each year, Site Selection Group utilizes GeoCision® to score and rank states based on their competitiveness for corporate investment (Best States for Manufacturing). We begin by scoring and ranking every metropolitan and micropolitan area (MSA) in the lower 48 states based on key variables of interest for a manufacturing project. Then, we average the scores of every MSA within each state to produce an overall state score.
Although specific criteria depend on a project’s needs, standard site selection variables drive most manufacturing location decisions: access to qualified labor, competitive costs, and strategic geographic positioning. Speed to market has also become an increasingly important decision factor for clients. Given the limited availability of ready-to-go sites, companies may be willing to compromise in areas they formerly would not have.
Variables and weightings used in Site Selection Group’s Best States for Manufacturing
In our 2024 rankings, Site Selection Group scored states based on the following categories and weightings.
Category |
Weighting |
Key Variables |
| Workforce & Market Alignment | 40% |
|
| Operating Costs | 30% |
|
| Geographic Positioning | 30% |
|
Each year we reevaluate the weighting of key drivers based on our corporate clients’ areas of focus. In this year’s iteration, we put more weight on cost factors, namely utility costs (especially electricity), property tax, and overall tax policy. In addition, we put more weight on wage inflation as it is an increasingly important driver of site selection decisions, especially as it pertains to companies looking to avoid competing with major “mega-project” announcements.
2024 Best States for Manufacturing
The table and interactive map below show the results of the 2024 rankings. The top five states in Site Selection Group’s 2024 Best States for Manufacturing are North Carolina, South Carolina, Tennessee, Indiana, and Kentucky. This list closely resembles previous years, with the usual states (e.g. SC, NC, and TN) scoring at the top again. In fact, the difference in scoring between the top position for North Carolina and second-place South Carolina is merely a few tenths of a percentage point — similar to when we see our corporate clients make very tough decisions about which Carolina to locate in.
Kentucky is an example of a state whose score has improved this year, especially as we put more weight on overall logistics, access to the U.S. consumer base, and utility costs. In summary, the top states’ success is largely due to favorable demographics and migration patterns, a strong manufacturing presence, low cost of doing business, access to consumer bases, and/or proximity to major ports.
Despite these rankings, states that might not score as well still have their own unique value propositions that should be evaluated on a project-specific basis. While state-level summaries can be helpful, ultimately market conditions vary significantly within each state. As a result, it is critical to evaluate locations at the market level when making site selection decisions. Site Selection Group works with clients to develop a holistic market-level analysis unique to each project’s requirements and can target states of potential interest, including specific markets, sites, and buildings within those favorable locations.
