KPMG: Louisiana Most Competitive For Business Costs

BATON ROUGE, La. — Louisiana ranks as the most competitive state in the U.S. for business costs while its three largest cities – New Orleans (No. 4 for lowest costs), Baton Rouge (No. 2) and Shreveport (No. 1) – rank among the most cost-competitive cities in the Southeast U.S., according to a study by the Big Four accounting and consulting firm, KPMG.

Published every other year, Competitive Alternatives 2016 is KPMG’s guide to international business location costs. It examines 26 separate cost factors (such as labor, transportation, utility, capital, tax and facility costs) and forecasts what those costs will be during the next 10 years in 133 cities in 10 countries. The report weighs costs for 19 different kinds of business operations in manufacturing; digital services; research and development, or R&D services; and corporate services.

In manufacturing, for example, Shreveport ranks No. 1, Baton Rouge No. 4 and New Orleans No. 6 among U.S. cities having the lowest business costs. Louisiana’s standing as the most competitive state for business costs represents an overall ranking for all business sectors.

“Louisiana claims the title for the lowest-cost U.S. state, with three cities – Shreveport, Baton Rouge and New Orleans – ranking among the top four cities in (the Southeast) region,” the KPMG report states.

Louisiana Economic Development Secretary Don Pierson said the Competitive Alternatives 2016 report reaffirms what LED and many professionals in the site selection community know: Louisiana competes very successfully on business costs but the state also offers much more to business prospects.

“In Louisiana, employers will find the No. 1 state workforce training program in LED FastStart®, as well as an outstanding inventory of port, rail, pipeline and highway infrastructure,” Pierson said. “We also provide a strong business climate, highly competitive incentives, an education system attuned to employer demand, and a vibrant small business community, making Louisiana a great location for employers in any sector.”

With average U.S. business costs indexed to a benchmark of 100, here’s how the KPMG guide scores Louisiana cities in major industry sectors:

• SHREVEPORT – 16.2 percent lower than the U.S. average for Digital Services; 16.2 percent lower for R&D Services, 17.6 percent lower for Corporate Services; and 4.9 percent lower for Manufacturing. The Northwest Louisiana city ranks No. 1 in the Southeast U.S. for Digital and Corporate services and No. 2 for R&D and Manufacturing.
• BATON ROUGE – 14.7 percent lower than the U.S. average for Digital Services; 12.3 percent lower for R&D Services; 15.1 percent lower for Corporate Services; and 4.4 percent lower for Manufacturing. In the Southeast U.S., the Louisiana capital ranks No. 2 for Digital, No. 12 for R&D, No. 9 for Corporate and No. 4 for Manufacturing.
• NEW ORLEANS – 14.4 percent lower than the U.S. average for Digital Services; 12.5 percent lower for R&D Services; 13.4 percent lower for Corporate Services; and 4.2 percent lower for Manufacturing. In the Southeast U.S., New Orleans ranks No. 3 for Digital Services; No. 9 for R&D Services; No. 14 for Corporate Services; and No. 6 for Manufacturing.