Supply Chain

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

May 21, 2008

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).

About the Author

Dave Blanchard Blog | Senior Editor

Focus: Supply Chain

Email: [email protected]

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Contributing Editor Dave Blanchard provides the IndustryWeek audience his expertise in lean supply chain, reporting on topics from logistics, procurement and inventory management to warehousing and distribution. He also specializes in business finance news and analysis, writing on such topics as corporate finance and tax, cost management, governance, risk and compliance, and budgeting and reporting.

Dave is also the chief editor of Penton Media’s Business Finance and editorial director of Material Handling & Logistics.

With over 25 years of experience, Dave literally wrote the book on supply chain management, Supply Chain Management Best Practices (John Wiley & Sons, 2010), and is a frequent speaker at industry events. Dave is an award-winning journalist and has been twice named one of the nation’s top columnists by the American Society of Business Publications Editors.

Dave received his B.A. in English from Northern Illinois University, and was a high school teacher prior to his joining the publishing industry. He is married and has two daughters.