Best States for Manufacturing
by Josh Bays, on Oct 24, 2016 3:21:30 PM
Although location drivers vary across specific manufacturing site selection projects, they typically include a mix of location factors customized around the needs of the company. Site Selection Group, which provides site selection services formanufacturing operations, recommends developing a set of balanced criteria when choosing the location for a new manufacturing plant.
The characteristics that typically drive location decisions include workforce availability and costs, transportation and logistics, business environment, regulatory climate, utilities and infrastructure, real estate and economic incentives. Because no single location will provide the best score in each of these areas, it is important to identify the optimal mix that best suits the long-term operations for each particular client.
Ranking the most competitive states for manufacturing
As a demonstration of this type of balanced approach, Site Selection Group used its proprietary GeoCision® analysis to provide an annual ranking of all 50 states based on weighted site selection variables that measure these primary considerations. These factors are not comprehensive, but they are representative of those typically utilized in industrial projects. Those factors and weightings used for this exercise are shown in the table below. Of course, in a “live” site selection project, Site Selection Group almost always builds this type of analysis at the metro level to score and rank all 917 metropolitan and micropolitan statistical areas to identify which ones warrant an in-depth site selection review.
| Ranking Criteria | Weighting |
|---|---|
| Labor availability | 35% |
| Logistics | 15% |
| Tax climate | 15% |
| Utility costs | 15% |
| Labor costs | 15% |
| Union climate | 5% |
Regions vary in competitiveness
We mapped and listed the results in the dashboard below. While no one state or region is a perfect fit for every project or specific industrial sector, there are a couple of clear trends. For starters, we see some of the “usual suspects” rise to the top – states that tend to rank well in manufacturing and business competitiveness rankings. Those include Southeastern states such as North Carolina and Georgia. In addition, other traditionally strong manufacturing states such as Indiana and Texas rank near the top, too.
One interesting change from the last time Site Selection Group performed this analysis is the rise of two Western states: Utah and Arizona. While the West may not be the right fit for every new and expanding manufacturing operation, it can offer attractive opportunities and communities that may warrant an in-depth analysis for companies looking to expand their western reach, Site Selection Group often sees companies with an established East Coast presence take a hard look at Western states to diversify their operational footprint and better serve customers and consumers on the West Coast.
Identifying the top states for manufacturing is only the starting point
With any site selection process, it’s imperative to start with a top-down approach that identifies the region, states and communities that may be a good fit for a particular project. As demonstrated here, Site Selection Group’s GeoCision® analysis helps companies identify places that may or may not work for their project. But the real work starts thereafter: Conducting an in-depth, community-level analysis with real-time data is the critical next phase to pinpoint the handful of communities that are truly competitive. While analyses like the one shown here are always informative, they’re only one part of an effective site selection exercise.
