Ranking States by Competitiveness for Manufacturing
As we head toward the end of the year, some interesting rankings for the manufacturing sector.
While specific criteria depend on a project’s needs, standard site selection variables drive most manufacturing location decisions: access to qualified labor, competitive costs, and strategic geographic positioning. Speed to market has also become an increasingly important decision factor for clients. Given the limited availability of ready-to-go sites, companies may be willing to compromise going to areas they formerly might not have.
In the 2024 rankings, states were scored based on the following categories and weightings.
Each year we reevaluate the weighting of key drivers based on our corporate clients’ areas of focus. In this year’s iteration, we put more weight on cost factors, namely utility costs (especially electricity), property tax, and overall tax policy. In addition, we put more weight on wage inflation as it is an increasingly important driver of site selection decisions, especially as it pertains to companies looking to avoid competing with major “mega-project” announcements.
2024 Best States for Manufacturing
The table and map below show the results of the 2024 rankings. The top five states may come as no surprise to most, as this list closely resembles previous years, with the usual states (e.g. SC, NC, and TN) scoring at the top once again.
Kentucky’s score has improved this year, especially as we put more weight on overall logistics, access to the U.S. consumer base, and utility costs. In summary, the top states’ success is largely due to favorable demographics and migration patterns, a strong manufacturing presence, low cost of doing business, access to consumer bases, and proximity to major ports.
Despite these rankings, states that might not score as well still have their own unique value propositions that should be evaluated on a project-specific basis. While state-level summaries can be helpful, ultimately market conditions vary significantly within each state/submarket. As a result, it is critical to evaluate locations at the market level when making site selection decisions.
