Atlanta, Tampa Rank Least-Expensive Large U.S. Cities for Business

Low labor and tax costs make San Juan, Puerto Rico the least-costly place to do business among 24 U.S. and affiliated cities with populations exceeding 1.5 million, according to a study by KPMG LLP, the audit, tax and advisory firm. San Jose, Calif., and New York were the most expensive places to do business among large U.S. cities.

In the continental United States, Atlanta and Tampa, Fla., emerged the most cost-competitive locations behind San Juan, closely ranked second and third, respectively, in the large-cities category. Other large cities with business costs below the U.S. average index of 100 were Phoenix, Indianapolis and Columbus, Ohio.

"Selecting the best site for a business operation requires balanced consideration of many factors, including business costs, business environment, personnel costs, and quality of life issues," said Larry Cusack, national partner in charge of KPMG's Strategic Relocation and Expansion Services practice. "This study offers a comprehensive guide for comparing business costs in the United States and contains essential information for any company seeking a cost advantage in locating a business operation."

The overall Competitive Alternatives study measured business-operating costs in 98 cities throughout 11 countries. Location-sensitive cost components such as labor, facility, transportation, utility and financing costs, as well as income taxes, were considered. The full text of the 2004 study is available online.

Cost indexes for the 24 large cities studied follows. The benchmark cost index (U.S. = 100) is defined as the average of nine representative U.S. cities.

COMPETITIVE ALTERNATIVES STUDY

U.S. Cities with population of more than 1.5 million)

City Rank and Cost Index

  1. San Juan, Puerto Rico, 93.0
  2. Atlanta, 99.2
  3. Tampa, 99.3
  4. Phoenix, 99.4
  5. Indianapolis, 99.6
  6. Columbus, 99.8
  7. Northern Virginia (Metro DC), 101.3
  8. St. Louis, 102.0
  9. Milwaukee, 102.1 (tie)
  10. Philadelphia, 102.1 (tie)
  11. Las Vegas, 102.2
  12. Portland, 102.5
  13. Dallas-Ft. Worth, 102.8
  14. Chicago, 103.5
  15. Boston, 103.8
  16. Minneapolis, 104.1
  17. Newark, 104.3
  18. Houston, 104.7
  19. Riverside-San Bernardino, 104.8
  20. San Diego, 105.1
  21. Seattle, 105.6 (tie)
  22. Detroit, 105.6 (tie)
  23. New York City, 109.8
  24. San Jose, 110.9

Cost index figures were created by measuring the combined impact of 27 cost components that are most likely to vary by location. More than 1,000 individual business scenarios were examined, analyzing more than 30,000 items of data. For comparison purposes, the national average was assigned a cost index of 100.0.

You may like these other stories...

Cybersecurity is no longer the domain of an organization's IT staff. It's moved to the boardroom, and in a big way. Accountants and financial managers may have been thinking it's just the province of the tech...
Boehner addresses GOP priorities ahead of midterm electionsHouse Speaker John Boehner (R-OH) on Thursday delivered what amounted to closing arguments ahead of the November elections, laying out a list of Republican...
Former DOJ Tax Division head Kathryn Keneally joining DLA Piper in New YorkGlobal law firm DLA Piper announced on Thursday that Kathryn Keneally, the former head of the US Justice Department Tax Division, is joining the firm...

Already a member? log in here.

Upcoming CPE Webinars

Sep 24
In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards. A dashboard condenses large amounts of data into a compact space, yet enables the end user to easily drill down into details when warranted.
Sep 30
This webcast will include discussions of important issues in SSARS No. 19 and the current status of proposed changes by the Accounting and Review Services Committee in these statements.
Oct 21
Kristen Rampe will share how to speak and write more effectively by understanding your own and your audience's communication style.
Oct 23
Amber Setter will show the value of leadership assessments as tools for individual and organizational leadership development initiatives.