BUSINESS STUDY RANKS CAPE HIGH

By Scott Moyers ~ Southeast Missourian

Of course it's cheaper to operate a business in Cape Girardeau than Chicago or St. Louis. But it might be news to some that it's also less expensive to do business here than nearly any other city in the Midwest.

That fact might be of special interest to a business owner trying to decide where to build or relocate a business.

A recently released study of business costs in 86 cities across nine industrial countries ranks Cape Girardeau sixth in North America's Midwest, which includes Canada.

If Canada is removed from the equation, Cape Girardeau is second in the U.S. Midwest, behind only Sioux Falls, S.D.

"I think it's pretty impressive the way our area stacks up," said Mitch Robinson, head of the Cape Girardeau Area Industrial Recruitment Association.

The study, called "Competitive Alternatives," was conducted by KPMG, one of the world's largest accounting and consulting firms.

Robinson said the Regional Developers Association of the Missouri Bootheel and his group paid $8,000 in state economic development funds to participate in the study, which looked at the cost of labor, taxes, transportation, energy, property and construction.

The 10-month research program included analyzing more than 1,000 individual business scenarios, examining more than 30,000 items of data. The scenarios and data were based on projected after-tax startup costs and operation for 12 specific types of business, over a 10-year time period.

Robinson said that the study will be an excellent recruitment tool to show business owners who are considering Southeast Missouri for expansion or new industry.

"That was the main point of doing it," he said. "It shows us how we stack up with other parts of the world, not just this country or the Midwest. Granted, a lot of times we won't be going up against Grenoble, France, or Vienna, Austria, but it gives someone the flavor of the cost advantages our community has."

Robinson said the fact that the group paid to be included in the study does not hurt the credibility of the findings.

"Not in my opinion it doesn't," he said. "KPMG is a very reputable firm and people spend money all the time to determine standings. They've been doing this for several years."

KPMG operates with more than 100,000 professionals including 7,000 partners in 760 cities worldwide. Total revenues in 159 countries were $12.2 billion in 1999.

Stuart McKay, founder and author of the study, said Cape Girardeau did well.

"It's good news," he said. "You're nick and tuck with Sioux Falls and were significantly better than some of the others."

McKay said it's a good idea for smaller communities to "think globally," and that it is not unreasonable to make comparisons with larger cities.

"Global trends affect every community in the world," he said. "Companies are more and more willing to look further and further afield."

Cheaper in Canada

On a more worldly scope, Canada was found to be the cheapest place to do business, while Germany and Japan are the most expensive. The United States ranked seventh on the list of least expensive countries, down from third place in 1999.

The United States' cost competitiveness has declined because the strength of the dollar relative to European currencies and relatively higher salaries for technical and professional jobs.

Among large cities, the study says that cheapest cities to do business are Montreal, followed by Toronto. The most expensive cities are Yokohama, Japan, followed by New York City and San Jose, Calif., which both tied for second.

Scott Moyers can be contacted at:

smoyers@semissourian.com