While 61% of projects are moving forward, the location choices at the top of the list include Boise, Colorado Springs and Columbia, S.C.<\/p>\n
The impact of COVID-19 has extended into the decision-making process that determines where a company will locate.<\/p>\n
Suburban areas and mid-size cities, followed by rural areas, will be the biggest winners of new corporate expansions and relocations, with large urban areas falling to the bottom of the list, according to a survey releads on July 16 by the Site Selectors Guild.<\/p>\n
\u201cEverything from physical distancing to changing transit preferences has affected the way that corporations view location decisions,\u201d said Rick Weddle, CEO of the Site Selectors Guild.<\/p>\n
Conducted the week of June 29, 2020, in partnership with Development Counsellors International (DCI), the survey of Guild members aimed to uncover changes and new trends in corporate location strategy brought on by the COVID-19 crisis.<\/p>\n
The top findings of this research follow:<\/p>\n
Suburbs and Mid-Size Cities Will Be the Next Winners for Corporate Location Projects<\/strong><\/p>\n The pandemic has brought suburban areas and mid-size cities into the forefront of consideration for future site selection projects and even put rural areas well ahead of large urban areas. When members were asked about locations that are \u201clikely\u201d or \u201cvery likely\u201d to be considered by corporations looking to expand, relocate or open new facilities in the next 12 months, 64% chose suburban areas, 57% chose mid-size cities, 31% chose rural areas, and just 10% chose large urban areas.<\/p>\n Consultants indicated that New York would be hit especially hard among the nation\u2019s largest cities. Of the consultants who agreed that large urban centers are \u201cnot at all\u201d or \u201cunlikely\u201d to be considered for future projects, 100% said that New York City would be among the least likely locations to be considered for future projects in the next 12 months. Los Angeles and Chicago followed with 63% and 42%, respectively.<\/p>\n Consultants were also asked to name specific mid-size cities that would be strong potential candidates for new locations or expansion projects in the next year and named the following cities (presented in alphabetical order):<\/p>\n \u25cf Boise, ID<\/p>\n \u25cf Colorado Springs, CO<\/p>\n \u25cf Columbia, SC<\/p>\n \u25cf Columbus, OH<\/p>\n \u25cf Greenville, SC<\/p>\n \u25cf Huntsville, AL<\/p>\n \u25cf Indianapolis, IN<\/p>\n \u25cf Kansas City, MO<\/p>\n \u25cf Raleigh-Durham, NC<\/p>\n \u25cf Reno, NV<\/p>\n \u25cf Tucson, AZ<\/p>\n Consultants Report 61% of Site Selection Projects are Moving Forward<\/strong><\/p>\n Consultants reported an uptick in projects moving forward in June compared to April, with 61% of Guild members reporting that companies are moving forward with site selection projects, a 16% increase since April. Of Guild members surveyed, 34% said that companies are pausing site selection projects, and 5% reported companies are consolidating facilities or canceling site selection projects.<\/p>\n There was also a general consensus that office projects will remain on hold until there is a clearer understanding on what the \u201coffice of the future\u201d will look like and footprint requirements. Guild members also indicated that manufacturing will continue to be driven by the need to de-risk the global supply chain. There will be an accelerated rate of reshoring as well as more, smaller regional facilities to mitigate risk.<\/p>\n Majority of Project Activity Predicted To Resume in 2021<\/strong><\/p>\n When asked to predict when client companies will restart expanding or adding new facilities, 13% of consultants reported that projects had already started moving forward in Q2 2020; however, with a rapid rise in COVID-19 cases across the U.S. in June when the survey was conducted, none of the Guild members predicted paused projects would restart in Q3 2020. Twenty-two percent indicated companies will restart projects in Q4 2020, 39% indicated Q1 2021 and 26% indicated after Q1 2021.<\/p>\n Food and Beverage Processing Emerges as Hot Industry, Biotech and Manufacturing Activity Continue to Hold Strong<\/strong><\/p>\n In both the April and June surveys, Guild members were asked to select the industry sectors that are seeing the most project activity as locations across the globe begin to reopen. In June, the food and beverage processing industry saw the largest increase in project activity when compared to the April survey. The top five most active industries \u2014 with comparisons to Guild member selections in April \u2014 are listed below:<\/p>\n 1. Biotech and Life Sciences \u2013 67% (down from 68%)<\/p>\n 2. Advanced Manufacturing \u2013 51% (up from 29%)<\/p>\n 3. Food and Beverage Processing \u2013 47% (up from 16%)<\/p>\n 4. Transportation and Logistics \u2013 44% (down from 48%)<\/p>\n 5. Software and IT \u2013 31% (up from 19%)<\/p>\n Economic Developers Should Begin Shifting Focus Back to Business Attraction<\/strong><\/p>\n As was reported in the April survey, Guild members believe an economic development organization\u2019s (EDO) priority focus in the COVID-19 environment should be on business retention and workforce development\/talent attraction. However, there has been a shift in thinking that EDOs can begin to elevate their focus on business attraction as well. When asked what the priorities should be for EDOs \u2013 on a scale from 1 (not a priority) to 5 (high priority) \u2013 Guild members assigned a rating of 3.6 to business attraction, a considerable increase from the rating of 2.9 in the April survey.<\/p>\n This Article was initially published on July 17, 2020 at industryweek.com<\/p>\n