Increased optimism, new business priorities

Unsteady economic conditions have forced widespread reconsideration of what matters most. Individuals and families have made tough choices relating to household expenses and lifestyle. Companies have adjusted their business practices to be competitive in today’s evolving marketplace.

All operational aspects have been scrutinized as part of that process. Everything from building design to process efficiency to facility location has been considered in the interest of gaining a competitive advantage. In some cases, that means better positioning to seize market share during tough economic times. In more extreme – and unfortunately, not uncommon – instances, companies are fighting to stay in business.

Every year, Area Development magazine surveys corporate executives about their business plans. The survey delves into how current economic pressures impact priorities. The magazine concluded from its most recent survey that, “The economy’s gradual recovery during 2010 has resulted in increased business optimism, a rise in new facility plans, and some changes in site selection priorities.”

A few additional noteworthy observations from the survey:

Focus on product. Nearly three out of four new facilities will serve a manufacturing, warehouse or distribution purpose.

Job growth is modest. More than three quarters of new domestic facilities will create fewer than 100 jobs, although at 77 percent that number represents a slight improvement over last year’s 80 percent.

Get goods to market. Cost effectively. Highway accessibility traded places with labor costs as the most important factor, but both are still among the three top considerations along with tax exemptions.

Think sustainably. Sustainable development is on the rise. High numbers of executives are making energy-saving modifications to existing facilities (85 percent), recycling or reusing waste products (59 percent), changing supply and distribution methods (28 percent), and seeking LEED certification for new or existing facilities (23 percent).

Market reactivity desired. Shovel-ready or pre-certified sites, which speed the development process, were cited as important nearly half the time.

Clustering matters. Businesses generally want to locate near others involved in similar activities.