KPMG Study: Baton Rouge, New Orleans Most Cost-Friendly Business Locations Among Mid-Sized U.S. Cities

NEW ORLEANS – Audit, tax and advisory firm KPMG LLP released its biennial Competitive Alternatives study which found Baton Rouge and New Orleans ranked the first and second most cost-friendly city to do business in among the 18 mid-sized cities (with populations ranging between 750,000 and 2 million) that were analyzed.

         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. Various state incentives help give Baton Rouge the second lowest effective corporate income tax rate in the study, according to the study that compares 18 mid-sized U.S. cities across a range of costs and other factors related to doing business.

         New Orleans was the second most cost-competitive location in the mid-sized category, followed by Nashville, TN, Omaha, NE, Albuquerque, NM, and Memphis, TN. Other locations ranked among the top 10 mid-sized U.S. cities included Indianapolis, Oklahoma City, Salt Lake City, and Raleigh, NC.

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         The study found New Orleans has higher labor, electricity and property tax costs and ranked second for 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.

         “KPMG’s Competitive Alternatives study provides insight into business location costs in cities across the United States and serves as a valuable benchmark for business executives, economic developers and policymakers considering sites for their business operations,” said Ulrich Schmidt, a managing director in KPMG’s Global Location and Expansion Services practice, which helps companies that are expanding, relocating or consolidating their facilities. “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.” 

         The 2016 KPMG Competitive Alternatives study measured 26 key cost components in each market, including costs associated with taxes, labor, facilities, transportation and utilities, as they apply to seven different business-to-business service sector operations and 12 different manufacturing sector operations.

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         The KPMG study revealed that Baton Rouge had a cost index of 92.8, representing business costs 7.2 percent below the U.S. national baseline of 100.0. New Orleans followed at 93.1, Nashville at 93.8 and Omaha at 93.9.

         KPMG LLP is the U.S. member firm of KPMG International Cooperative (“KPMG International”). KPMG International’s member firms have 174,000 professionals, including more than 9,000 partners, in 155 countries.

         Read the complete 2016 global study here

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