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The Most Affordable Place to do Business in the U.S.

According to a study conducted by global professional services firm KPMG, the most affordable city to conduct business in the United States isn't actually in the United States. Before I confuse you too much, the number one city on their list is San Juan, Puerto Rico.

KPMG's Competitive Alternatives study compares the cost of doing business in North America, Europe and Asia Pacific, taking into consideration more than two-dozen financial components, including transportation, personnel, facilities, and capital requirements. For the United States, cities are ranked by region and population size, and from that group San Juan has the overall lowest costs among all 59 U.S. cities included in the study. With its unique tax structure and low labor and office leasing costs, San Juan ranked above other competitive locations like Atlanta, Tampa, Dallas-Fort Worth and Baltimore.

For industry results, San Juan ranked as the least-expensive city in North America for the manufacturing of aerospace products, chemicals, electronics, medical devices, pharmaceuticals, precision equipment and telecommunications. San Juan is also the most economical location in the United States for research in biotechnology, product testing, and the most affordable in all of North America for the development of clinical trials, software, Web and multimedia, and corporate services. Here's the Top 10 breakdown:

1. San Juan, PR
2. Shreveport, LA
3. Little Rock, AR
4. McAllen, TX
5. Oklahoma City, OK
6. Greenville-Spartanburg, SC
7. Montgomery, AL
8. Lexington, KY
9. Jackson, MS
10. Nashville, TN

A glance at the list of U.S. cities reveals that every city in the Top 10 is located in a warm weather climate, which are also cities where the cost of labor tends to be much less expensive than in other parts of the country, and where labor unions have far less of a footprint than in the Midwest and Northeast. Not surprisingly, then, on a global comparison, five cities in Mexico finished 1-5 worldwide in terms of low-cost manufacturing (Japan was the only Asian country included in the study).

TAGS: Supply Chain
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