Covid-19 is encouraging US corporations to look at relocating and expanding operations to mid-sized cities and the suburbs at the expense of large urban areas, according to a new survey.

The study conducted by US-based trade association Site Selectors Guild (SSG) and place marketing firm Development Counsellors International surveyed 50 SSG members.

Sixty four percent of respondents reported that suburban areas are “likely” or “very likely” to be considered by corporations looking to expand, relocate, or open new facilities in the next 12 months, and 57% said the same of mid-sized cities.

Thirty one percent saw rural areas as likely to be considered, while only 10% saw large urban areas as likely to attract corporate expansion and relocations.

“Everything from physical distancing to changing transit preferences has affected the way that corporations view location decisions,” Rick Weddle, president and CEO of the Site Selectors Guild, said in a statement.

A number of mid-sized US cities were cited as strong potential candidates for new locations or expansion projects over the next year including Boise, Columbus, Huntsville, Indianapolis, Kansas City, Raleigh-Durham and Reno.

New York City, on the other hand, was named as the least likely city to be considered for future projects among consultants who deemed large urban areas unlikely to attract corporations.

Moving forward

In addition to finding increased enthusiasm for suburban areas and mid-sized cities, the survey also found that more companies are pushing ahead with their site selection projects after pausing them earlier this year.

Sixty one percent of the consultants surveyed reported site selection projects moving forward, with 34% pausing them and 5% canceling them altogether.

This marks a 16% improvement since the Guild’s previous survey in April, which found only 45% of site selection projects moving forward. 69% of respondents also predicted that the majority of site selection activity would resume 2021.

In a sign of growing confidence, they recommended that Economic Development Organisations shift their focus from business retention – which became the priority in April as new projects ground to a halt – back to business attraction.

Shifting sectors

The survey also asked site selection consultants which industries are seeing the most activity as projects resume. Echoing the results of the April survey, 67% responded that the biotech and life sciences sector is the most active industry.

The food and beverage processing sector saw the largest increase in project activity of any sector, with 47% of consultants reporting activity in this sector, up from 16% in April. Advanced Manufacturing and Software and IT also saw increases.

Office projects, on the other hand, will remain on hold for the foreseeable future, with corporations pausing new projects until there is a clearer understanding of what the “office of the future” will look like.