Baton Rouge’s favorable costs for industrial facility construction, property taxes, natural gas, electricity and labor all contributed to its first place ranking among 18 mid-size U.S. metro areas as the most cost-friendly city in which to do business, according to KPMG’s 2016 Comparative Analysis released today.
The study provides insight into business location costs in various U.S. cities and serves as a benchmark for business executives, economic developers and policymakers considering sites for their businesses, Ulrich Schmidt, a managing director in KPMG’s Global Location and Expansion Services practice, says in a statement. KPMG is an audit tax and advisory firm.
Its global location and expansion services practice helps companies consolidating, relocating or expanding their facilities.
According to a news release, KPMG’s study measured in each market 26 key cost components, such as labor, taxes, utilities, transportation and facilities, as they relate to 12 manufacturing sector operations and seven different business-to-business sector operations.
Baton Rouge had a cost index of 92.8, meaning business costs were 7.2% below the national baseline, the report says.
“Baton Rouge’s top ranking results primarily from its low property taxes and low costs for industrial construction and natural gas, coupled with the second lowest electricity costs and moderately low labor costs,” the report reads. “Various state incentives help give Baton Rouge the second lowest effective corporate income tax rate.”
New Orleans was ranked No. 2 with an index of 93.1. The city, KPMG says, had higher costs for labor, electricity and property taxes. It also ranked second in terms of industrial construction costs.
“However, New Orleans has the lowest effective corporate income tax rate among the group of mid-sized cities compared, as well as low transportation and office lease costs,” the report notes.
