Race to the Bottom

From the Desk of the Editor in Chief

Several times a year, Business Facilities strives to tell you who is at the top of the heap in the never-ending competition between locations. In most cases, those who reach the highest get the most attention.

This month, we turn that focus upside down. Our cover story identifies the leading low-cost manufacturing centers. When it comes to the cost of doing business, nobody wants to come out on the high end.

We want to give special thanks to our friends at KPMG, who gave us an early look at their 2010 Competitive Alternatives analysis, which forms the heart of our cover feature. KPMG’s survey is issued every two years and it is without a doubt the most comprehensive cost analysis undertaken. The scope of the 2010 report requires a deep breath just to recite: KPMG examined 112 cities in 10 countries and compared 26 cost components as they applied to 17 business sectors over a 10-year planning horizon.

Some of the results are surprising; all are informative. Mexico continues to be a low-cost leader, primarily due to inexpensive labor; Canada fared well, in part due to currency fluctuations in its favor. Japan got clobbered by the rising yen, and the U.S. slipped a bit because the analysis formula gave greater weight to the largest cities.

To come out on top in this heated competition, you have to hit bottom. Congratulations to all of the low-cost manufacturing centers. Keep up—or, rather, down—the good work!