| US gains ground as cost-effective location |
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| Thursday, 27 March 2008 | |
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Page 2 of 2 Non-cost factors New to the 2008 report is analysis of a wide variety of non-cost factors that influence the attractiveness of business and site locations. Site selection factors compared in the report include macro-economic indicators, labour markets, innovation, business and environmental regulation, quality of infrastructure, energy supply, and quality of life. Glenn Mair of MMK Consulting, one of the study authors in association with KPMG, said that selecting the most favourable business location doesn't always come down to merely dollars and cents. “One of the key reasons the non-cost factors were included in this study is that factors such as education, skilled labor pool, and cost of housing, for example, may play a key role in the success of a business," Mair added. Mexico ranks first among the countries studied, with business costs 20.5 percent lower than in the United States. This rating reflects Mexico's status as the first emerging industrialised country to be included in competitive alternatives. Canada, the US and Australia rank second, third and fourth respectively, but with less than 1 per cent separating them. The United States has experienced the greatest gain in cost competitiveness since 2006, improving its position significantly against all other countries due to the depreciation of the US dollar. Low inflation rate France ranks fifth among the 10 countries examined, and has the lowest cost structure among the European countries studied. The United Kingdom, the Netherlands and Italy are also very closely grouped, ranking sixth through eighth, with business costs between 7.1 and 7.9 percent above the US benchmark. Japan is still a relatively high-cost jurisdiction, ranking ninth overall. It has gained some ground against other countries over the longer-term, however, due to its low inflation rates and the lower volatility of the yen vis-à-vis the US dollar. Germany (ranked tenth) has the highest cost structure overall, with costs 16.8 higher than the US benchmark. Germany, along with Italy and Japan, also face the additional challenge of an ageing population, with the largest proportions of the population older than 44 and the smallest proportion under 25. Related articles
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