Top Takeaways from Site Selectors Guild Survey Predictions After COVID-19 Survey
n these moments of tremendous uncertainty, we look for guidance from leaders to help us discern what is happening around us in real-time as well as prepare for what may lie ahead. This is one of the many reasons we are fortunate to be a member of the Site Selectors Guild (SSG). It allows us to tap into a wealth of curated resources and trusted colleagues from around the world at the forefront of the site selection industry. In April, the SSG sprang into action to survey members on the continuously evolving economic climate and provide some insight into what we see today, along with the challenges and opportunities ahead of us. In an effort to help you digest the findings to what is most relevant to your situation, here are our top takeaways:
Hitting the Pause Button
Yes, 52% of the respondents indeed said that companies are pausing site selection projects. However, 45% said they are moving forward with site selection projects. We are seeing similar trends within our practice and expect to see this number continue to fluctuate based on how positively the economy can safely re-open and regain momentum. When will the return of economic activity happen? Predictions were almost evenly split at 55%, looking to Q4 of 2020, while 45% thought sometime in 2021 seemed more realistic. The potential onset of a recession in selected areas of the world, including North America, could alter this timeline as we move forward.
Industries Who Will Come Out Ahead and Who Will Need Deeper Recovery
History has repeatedly shown us that in arduous times, there are industries that will find new prosperity or demand, and others who will need to pivot or risk perishing. Here is what the survey learned from respondents on which industries will be the most active in location decisions. Given the pervasive nature of the pandemic, it is not a stretch to understand why 68% of respondents selected the Biotech and Life Sciences industries as highly active as we emerge from this crisis. Transportation and Logistics, also a key player in recovery efforts, was chosen by 48% of SSG members as another active sector. Advanced manufacturing wasn’t far behind at 39%. The next layer of activity was seen by software and IT at 19% and Beverage processing at 16%.
Companies Will Re-Evaluate Global Supply Chain Strategy for Risk Factors
The global market had already been a contemplating strategy shift due to disruption factors, including climate change, rising transportation costs, tariffs, and improvements in advanced manufacturing. The subsequent large-scale impact on the global supply chain has now only accelerated the timeline and emphasis of these and other strategy shifts. In record time, the global market faced a demand drop in sectors such as automotive and agriculture. At the same time, demand spiked in sectors such as household supplies and medical equipment. This is why we expect to see the Biotech and Life Sciences industry sector diversify locations and not be solely reliant on China to manufacture some products. To be more adept in the future, we expect to see increased investment in warehouse space for short-term inventory needs. Also, a renewed regional or local strategy around manufacturing capacity to minimize a company’s overall risk. In addition, watch for potential government support for investments at home to also reduce overall risk for our country as a whole.
How to Keep the Economic Development Engine Running
What will keep economic development afloat and regaining prosperity is exponentially growing needs that were already in play. As advanced manufacturing continues to expand automation capabilities, workforce training must abruptly rise to meet that need. As the remote workforce continues to emerge, areas that can provide high-speed broadband access will see more opportunities. As companies decide where to fulfill more local and regional needs, available turnkey sites and buildings will be critical. Communities will continue to be essential partners in bridging the supply chain divide and innovating ways to bring new investors and current capabilities together. As we have always seen, a thriving economy requires collaboration.
The Site Selectors Guild As a Trusted Resource
Again, we are grateful that the Site Selectors Guild continues to provide respected leadership and trusted insight to professionals interested in site selection and economic development during this uncertain moment in time. While founded in 2010, just in the past three years, SSG members have facilitated the announced creation of approximately 165,000 jobs and $90 billion in announced capital investment. SSG members are peer-nominated, vetted, and must demonstrate significant professional location advisory experience and integrity. Guild membership is the highest standard in the site selection industry and we are pleased to be a part of SSG.
W ith more than 30 years of economic development and site selection experience, Larry Gigerich has served clients all across the United States and beyond. Amidst the uncertainties with the coronavirus outbreak, economic development professionals, business leaders, and...