Cleveland Ranked 4th Most Cost-Friendly City For Business: Study

CLEVELAND, OH — Looking to move your business to a more wallet-friendly city? Cleveland may be your answer.

Cleveland was ranked the fourth most cost-efficient large city for businesses in the United States in a study by accounting firm KPMG,

The report measured 26 different components in each market. The variables were all business-related factors including costs of taxes, labor, facilities, transportation and utilities. The report then applied the measurements to both service sector and manufacturing sector industries, according to KPMG.

“Many factors go into site selection decisions, and a study such as ours helps businesses, city leaders and economic development teams begin to consider investments that should ultimately be good for the community and good for business," Ulrich Schmidt, a managing director in KPMG’s Global Location and Expansion Services practice, said in a press release.

KPMG assigned a cost index to each market in order to calculate how cost-friendly each is for business. Cleveland scored a cost index of 94.6, a little greater than five points below the U.S baseline score of 100.

The score means that it's about five percent cheaper to do business in Cleveland than the national average.

Cleveland's score was beat only by in-state rival Cincinnati (94.0), Orlando (94.4) and Tampa (94.6). Rounding out the top five was San Antonio with a cost index score of 94.7.

Cleveland's low cost index score was earned by low industrial leasing costs and moderate operating costs across multiple industries.

"Despite ranking fifth or higher in all other operating cost categories, Cleveland, at 94.6, has the third lowest industrial lease costs and moderate costs in all other operating cost categories," said the KPMG study.

Here's a complete breakdown of how Cleveland performed in the Competitive Alternatives study:

Major industries

Traditional industries:

• Chemicals/plastics
• Equipment/machinery manufacturing
• Metal manufacturing/products

Modern and/or emerging industries:

• Entertainment and/or casino gaming
• Environmental technologies and engineering
• Information/communications technology

Industry — Operation — Index rating (US=100)

Digital services:

Digital entertainment — Video game production — 84.8

Software design — Software development — 93.6

Digital services average: Average of two operations — 89.6

R&D services:

Biotechnology — Biomedical R&D — 89.1

Clinical trials— Clinical trials management — 92.9

Product testing— Electronic systems development & testing — 88.6

R&D services average: Average of three operations — 89.6

Corporate services:

Professional services— International financial services — 88.3

Support services— Shared services center — 87.8

Corporate services average: Average of two operations — 88.0

Manufacturing:

Aerospace — Aircraft parts —96.9

Agri-Food — Food processing — 96.5

Automotive — Auto parts — 97.0

Chemicals — Specialty chemicals — 97.8

Electronics — Electronics assembly — 97.0

Green energy — Advanced batteries — 97.3

Medical devices — Medical device manufacturing — 96.0

Metal components — Metal machining — 96.0

Pharmaceuticals — Pharmaceutical products — 96.7

Plastics — Plastic products — 96.1

Precision manufacturing — Precision components — 97.5

Telecommunications — Telecom equipment — 97.1

Manufacturing average: Average of 12 operations — 96.9

Overall result: Average of 19 operations — 94.6

Here's the complete ranking of cost indexes among cities over 2 million in the United States:

1. Cincinnati, OH: 94.0
2. Orlando, FL: 94.4
3. Tampa, FL: 94.6
4. Cleveland, OH: 94.6
5. San Antonio, TX: 94.7
6. Atlanta, GA: 95.1
7. Charlotte, NC: 95.2
8. Miami, FL: 95.4
9. St. Louis, MO: 96.1
10. Kansas City, MO: 96.2
11. Phoenix, AZ: 96.2
12. Dallas-Fort Worth, TX: 96.2
13. Baltimore, MD: 96.5
14. Detroit, MI: 96.8
15. Minneapolis, MN: 96.8
16. Pittsburgh, PA: 97.0
17. Houston, TX: 97.6
18. Portland, OR: 97.6
19. Denver, CO: 97.8
20. Las Vegas, NV: 98.0
21. Chicago, IL: 98.3
22. Sacramento, CA: 98.5
23. Riverside-San Bernardino, CA: 98.5
24. North Virginia, Metro DC: 99.4
25. Philadelphia, PA: 99.8
26. San Diego, CA: 99.9
27. Seattle, WA: 100.8
28. Los Angeles, CA: 100.8
29. Boston, MA: 101.2
30. San Francisco, CA: 104.5
31. New York City, NY: 104.7

[Photo courtesy of Carlos Javier via creative commons]