ince 60 percent of our readers are chief executives or comparable, it’s likely you also subscribe to Chief Executive magazine. If so, you may recall coverage recently of their “Chief Executive CEO Confidence Index,” which revealed a healthy optimism where the U.S.’s economic prospects are concerned. For example, 55 percent of CEOs expect hiring to increase at their companies over the next quarter.
Even more interesting to me was their recent “Best and Worst States” report, ranking the states that survey respondents said were the best and worst for doing business — which is not unlike the annual business-climate rankings we publish each November.
I mention this here because the survey asks chief executives of large companies much the same thing we — the leading U.S. corporate real estate and economic development publication — ask our readers. One difference between the two is Site Selection blends the executives’ input (50 percent) with objective business-expansion activity resident in our proprietary New Plant database (also 50 percent). But the results of the two exercises are remarkably similar, which to me confirms their veracity.
Chief Executive‘s most recent report ranks Texas, Nevada and North Carolina the three best states in which to do business. Our most recent business-climate ranking: North Carolina, Texas and Georgia. But the executives’ component alone ranks them this way: Texas, Georgia and North Carolina; Nevada came in 9th. Texas also ranked first in our 2004 business-climate ranking by both measures — executives’ input alone and that input blended with the New Plant numbers. And for the second year in a row, Gov. Rick Perry of Texas is the recipient of our Governor’s Cup award, which recognizes the state with the most new or expanded facilities as tracked by our New Plant database — see the cover story of this issue.
According to Chief Executive, CEOs ranked labor and political issues as the most important factors in choosing where to do business. Work-force quality was the biggest determinant followed by labor costs.
Taxation and regulation were next on the list. We hear the same things in discussions with our readers, but Site Selection readers would likely put logistics concerns, such as access to distribution channels, and energy cost and availability near the top of their lists. That’s because Site Selection readers don’t just “do business” in a state, which can mean simply having a sales office there. Our readers invest serious capital in a state — just ask Gov. Perry. And the extent to which states invest in their investors by keeping the regulatory burden to a minimum and enacting funds to help land and fast-track projects (like Texas’ Enterprise Fund) will drive their rise to the tops of these and other surveys in the business press.
Besides the Governor’s Cup, I would draw your attention to the other rankings in this issue of Site Selection — Top Metros and Micropolitans and Top Industries. If you happen to be in one of the communities ranking highly this year, why not congratulate your local economic development officer? But save some credit for yourself. Just as with our business-climate ranking, an area wouldn’t be on the list if you — the corporate real estate decision maker — hadn’t voted with your company’s checkbook.
Till next time,
Mark Arend