New York State is often perceived as an expensive place to locate a business. This assertion is misleading. New York is a very diverse state with urban and rural extremes. The concentration of population and businesses in the New York City metropolitan area has a tremendous reflection on the cost of doing business statewide. While many expenses are great in NYC, they are not absolutely similar in the rural portions of the state. The cost of doing business in Southwest NY is very competitive with other parts of the country.
Because of the rural nature of the region, it is difficult to gather specific indices of the cost of doing business. Statisticians and government agencies focus on metropolitan areas, which again can be misleading. Herein we will utilize a variety of geographic references and data sources to try and paint the picture of business costs in Southwest NY.
While many factors in the cost of doing business are incomparable between urban and rural areas, some are more comparable. Taxes are generally comparable. State level taxes are the same throughout and local taxes are relatively similar. For the Buffalo-Niagara Falls Metropolitan area, taxes were 17.9% higher compared to other metropolitan areas across the nation in 1998. On the surface this looks like bad news, however this is a considerable drop from the high point in 1994. In fact it has dropped every year since 1994.
Energy costs have increased over the past several years, but the ranking of Buffalo-Niagara in comparison to other metro areas has dropped. This indicates that other areas are experiencing higher growth rates in energy cost. Generally speaking southern areas of the country have lower energy costs than Southwest NY due to the winter heating season.
Office rents, another cost of doing business indicator, is considerably lower in Southwest NY in comparison to other areas. In Buffalo-Niagara office rents are 18% below the national average. In Southwest NY they are even lower.
Buffalo-Niagara has an overall cost of doing business that is about 5.9% higher than the national average for metropolitan areas. They have a competitive cost advantage over Long Island, Hartford, Syracuse, Rochester, and Detroit. Southwest NY has a lower cost of doing business, though it is difficult to quantify because of a lack of data.
It is clear that Southwest NY does not fit the stereotype of high cost of doing business. It is competitive with all surrounding areas, and most others nationwide. And it just keeps getting better. In recent years every basic category considered in a cost of doing business calculation has fallen or grown at a slower rate than comparable areas.
For more information on the cost of doing business in the area, primarily for the Buffalo-Niagara region, review the State of the Region prepared by the Institute for Local Governance and Regional Growth at the University at Buffalo.
Why not explore business in Southwest NY. Use the tools below to see what businesses have made this region home.
|
