Sep 25, 2011
Bill McMeekin
Bill McMeekin
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Site Selectors: More Activity, Fewer Announcements

Site Selection location flag marker

The only thing certain is the uncertainty.

That message, relayed to an audience of 1,000 economic development and government leaders from across Tennessee, came from three veteran site selection professionals who spoke at the opening of the 58th annual Tennessee Governor’s Conference on Economic Development in Nashville.

Jonathan Sangster, senior managing director at CBRE Consulting in Atlanta, said 2010 was marked by a strong uptick in expansion and growth opportunity. “We hit a lot of home runs,” he said. In 2011, activity levels remain strong in terms of requests for proposals, but Sangster said most of the projects are falling into the 50- to 100-job category instead of the 500- to 1,000-job category as they had earlier. “We’re hitting a lot more singles and doubles now,” he said.

Paul Hampton, director of consulting for Newmark Knight Frank, said economic uncertainty has made it difficult for his firm’s clients to forecast their plans beyond 12 months as they struggle to understand where demand will be and what employment needs will be.

Veteran site selection professional Mark Sweeney of McCallum Sweeney Consulting in Greenville, S.C., noted that uncertainty is the enemy of capital investment and that a number of projects have been shelved because there was not enough certainty to justify the capital risk.

“Proposal activity is up, announcement activity is down,” Sweeney said. “These are not tire kickers. If they (corporate clients) are paying us, they are serious to some degree.”

Sector drawing activity include health sciences and life care, advanced manufacturing, food production, telecom, and logistics and supply chain. Hampton noted increased activity from research-intensive sectors that are not tied to co0nsumer markets, including alternative energy, biotech and nanotechnology.

The site selection professionals also pointed to increasing demand for “reshoring” projects, where domestic manufacturing that had left the for lower labor cost markets is shifting back to the United States.

“Companies are looking at their global supply chains,” Hampton said. “The embodied cost of having offices and locations around the world does not always offset lower labor costs.”

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  • September 28, 2011
    Richard Stevens wrote:

    I missed the conference, but appreciate your blog covering this interesting aspect.

    Reply to this post