Oklahoma City’s strong cost advantages for labor, facility leases, expenses and property taxes contribute to its ranking as the least-costly city to do business among 13 locations in the United States with populations between 1 million and 2 million, according to a study by KPMG LLP, the audit, tax and advisory firm. Nashville, Tenn., ranked second in the study for mid-sized cities.
New Orleans and Indianapolis ranked third and fourth, respectively. Other cities that ranked high were Raleigh, N.C., (5) and Austin, Texas (6). Further down the list of 13 cities were Salt Lake City (7); Buffalo, N.Y. (8); Wilmington, Del. (9); and Providence, R.I. (10).
“KPMG’s Competitive Alternatives study provides a thorough biennial comparison of some key metropolitan area business locations in the United States, offering a comprehensive guide for companies considering sites for their business operations,” said Hartley Powell, principal in KPMG’s Global Location and Expansion Services practice.
“The KPMG study is particularly valuable for its measurement of significant factors that contribute to business operating costs and which often vary by location, including costs associated with taxes, labor, facilities, transportation and utilities,” he said.
KPMG’s 2012 Competitive Alternatives study measured 26 significant cost components in each market, including labor, taxes, real estate and utilities, as they apply to 19 industries over a 10-year analysis horizon. Information is also provided on a variety of non-cost components. The study enables companies to perform a “quick scan” of locations to determine which markets can offer an advantageous business environment.
The 13 Mid-Sized Cities’ Cost Index Results
Consider Incentives and Credits
“While business costs are a major component of the site-selection process, businesses should carefully consider non-cost factors that influence the business attractiveness of different locations,” Powell said. “Our study addresses these non-cost factors, which include labor availability and skills, economic conditions, infrastructure, innovation, regulatory environment, cost of living and quality of life.”
Cost indexes for the 13 mid-sized U.S. cities studied follow. The baseline cost index (U.S. = 100.0) is defined as the average of business costs in the four largest U.S. metropolitan areas: New York, Los Angeles, Chicago, and Dallas-Fort Worth.
KPMG’s 2012 COMPETITIVE ALTERNATIVES STUDY
(U.S. Cities with population of 1 million to 2 million)
|Oklahoma City, OK||95.5||1|
|New Orleans, LA||96.0||3|
|Salt Lake City, UT||97.2||7|
|Las Vegas, NV||98.7||11|
Cost-index figures were created by measuring the combined impact of 26 cost components that are most likely to vary by location. More than 1,900 individual business scenarios were examined, analyzing more than 50,000 items of data.
These U.S. mid-sized city results are part of a global 2012 Competitive Alternatives study, which measured business operating costs in more than 110 cities in 14 countries. The complete 2012 study is available online at www.CompetitiveAlternatives.com.
About KPMG’s Global Location and Expansion Services Practice
KPMG’s Global Location and Expansion Services practice, with more than 50 U.S. professionals, offers a comprehensive range of expansion-based business services that help companies find tax and non-tax efficiencies when expanding, relocating or consolidating their facilities. The practice operates domestically and globally and is part of KPMG’s State and Local Tax practice in the United States.
About KPMG LLP
KPMG LLP, the audit, tax and advisory firm (www.kpmg.com/us), is the U.S. member firm of KPMG International Cooperative (“KPMG International”). KPMG International’s member firms have 145,000 people, including more than 8,000 partners, in 152 countries.