Report: Saint Louis, Kansas City *Not* Among Most Cost-Friendly Cities for Business
Recently, the Post-Dispatch prominently published an article claiming that, “St. Louis is among the top 10 most cost-friendly cities to do business in the country.” The article’s source was a study by KPMG, which ranks more 70 cities by business costs (lower index being better). The only problem is that, if one follows the links in the Post-Dispatch article, they’ll find that Saint Louis is certainly not one of the most cost-friendly cities for business.
Far from it. Of the 77 U.S. cities that KPMG ranked (which was not exhaustive of all major metros), Saint Louis ranked 45th and Kansas City ranked 46th. Among the cities cheaper than Saint Louis (and Kansas City) are regional competitors like Nashville, Omaha, Cincinnati, Memphis, Indianapolis, Cleveland, and Oklahoma City, to name a few. Worse yet, Saint Louis was more expensive than all 18 Southeastern cities KPMG looked at, from Atlanta to New Orleans.
Rank |
Metro Area |
Region |
Cost Index |
1 |
Charlottetown, PE |
New England |
83.9 |
2 |
Shreveport, LA |
Southeast |
91.7 |
3 |
Youngstown, OH |
Northeast |
92.5 |
4 |
Baton Rouge, LA |
Southeast |
92.8 |
5 |
Savannah, GA |
Southeast |
93.1 |
6 |
New Orleans, LA |
Southeast |
93.1 |
7 |
Lexington, KY |
Northeast |
93.2 |
8 |
Little Rock, AR |
Southeast |
93.3 |
9 |
Gulfport-Biloxi, MS |
Southeast |
93.3 |
10 |
Jackson, MS |
Southeast |
93.3 |
11 |
Montgomery, AL |
Southeast |
93.4 |
12 |
Mobile, AL |
Southeast |
93.7 |
13 |
Charleston, WV |
Northeast |
93.8 |
14 |
Nashville, TN |
Southeast |
93.8 |
15 |
Cedar Rapids, IA |
Midwest |
93.8 |
16 |
Omaha, NE |
Midwest |
93.9 |
17 |
Cincinnati, OH |
Northeast |
94 |
18 |
Sioux Falls, SD |
Midwest |
94.1 |
19 |
Fargo, ND |
Midwest |
94.3 |
20 |
Boise, ID |
Pacific |
94.3 |
21 |
Memphis, TN |
Southeast |
94.4 |
22 |
Orlando, FL |
Southeast |
94.4 |
23 |
Albuquerque, NM |
Midwest |
94.4 |
24 |
Billings, MT |
Midwest |
94.4 |
25 |
Spartanburg, SC |
Southeast |
94.5 |
26 |
Indianapolis |
Northeast |
94.6 |
27 |
Cleveland, OH |
Northeast |
94.6 |
28 |
Tampa, FL |
Southeast |
94.6 |
29 |
Cheyenne, WY |
Midwest |
94.6 |
30 |
Saginaw, MI |
Northeast |
94.7 |
31 |
San Antonio, TX |
Midwest |
94.7 |
32 |
Wichita, KS |
Midwest |
94.7 |
33 |
Oklahoma City, OK |
Midwest |
94.7 |
34 |
Bangor, ME |
New England |
94.8 |
35 |
Champaign-Urbana, IL |
Midwest |
94.8 |
36 |
Beaumont, TX |
Midwest |
94.9 |
37 |
Salt Lake City, UT |
Midwest |
95 |
38 |
Raleigh, NC |
Southeast |
95.1 |
39 |
Atlanta, GA |
Southeast |
95.1 |
40 |
Charlotte, NC |
Southeast |
95.2 |
41 |
Miami, FL |
Southeast |
95.4 |
42 |
Richmond, VA |
Northeast |
95.5 |
43 |
Madison, WI |
Midwest |
95.7 |
44 |
Spokane, WA |
Pacific |
96 |
45 |
St. Louis, MO |
Midwest |
96.1 |
46 |
Kansas City, MO |
Midwest |
96.2 |
47 |
Phoenix, AZ |
Midwest |
96.2 |
48 |
Austin, TX |
Midwest |
96.2 |
49 |
Dallas-Fort Worth, TX |
Midwest |
96.2 |
50 |
Baltimore, MD |
Northeast |
96.5 |
51 |
Providence, RI |
New England |
96.7 |
52 |
Detroit, MI |
Northeast |
96.8 |
53 |
Minneapolis, MN |
Midwest |
96.8 |
54 |
Burlington, VT |
New England |
96.9 |
55 |
Pittsburgh |
Northeast |
97 |
56 |
Manchester, NH |
New England |
97.2 |
57 |
Houston, TX |
Midwest |
97.6 |
58 |
Portland, OR |
Pacific |
97.6 |
59 |
Wilmington, DE |
Northeast |
97.7 |
60 |
Denver, CO |
Midwest |
97.8 |
61 |
Las Vegas, NV |
Pacific |
98 |
62 |
Hartford, CT |
New England |
98.2 |
63 |
Rochester, NY |
Northeast |
98.3 |
64 |
Chicago, IL |
Midwest |
98.3 |
65 |
Sacramento, CA |
Pacific |
98.5 |
66 |
Riverside-San Bernardino, CA |
Pacific |
98.5 |
67 |
Metro DC |
Northeast |
99.4 |
68 |
Philadelphia |
Northeast |
99.8 |
69 |
San Diego, CA |
Pacific |
99.9 |
70 |
Seattle, WA |
Pacific |
100.8 |
71 |
Los Angeles, CA |
Pacific |
100.8 |
72 |
Boston, MA |
New England |
101.2 |
73 |
Trenton, NJ |
Northeast |
101.8 |
74 |
Honolulu, HI |
Pacific |
103.9 |
75 |
San Francisco, CA |
Pacific |
104.5 |
76 |
New York City, NY |
Northeast |
104.7 |
77 |
Anchorage, AK |
Pacific |
108.1 |
So where did the Post-Dispatch get a top ten ranking for Saint Louis? If we only consider regions with populations greater than two million (of which KPMG ranked 31), Saint Louis is the 9th cheapest. I will leave it to the readers of this blog to decide if Saint Louis should pat itself on back for being cheaper than New York, Los Angeles, and Chicago, when it has higher costs for businesses than Nashville, Memphis, and just about every other regional competitor. But if we do decide to use population as criteria, it seems more justified to look at metros with populations similar to those of Saint Louis and Kansas City (between two and three million residents). When we do that, Saint Louis is 7th and Kansas City is 8th out of 14 such cities. That seems awfully middling.
That’s probably why, if one reads the study that the Post-Dispatch reports on, they’ll find that it does not claim that Saint Louis is among the most competitive cities in the country. KPMG didn’t even break down cities by population in the study, choosing instead to do so by region. The Post-Dispatch story (while citing the study) is actually based on an ancillary KPMG press release, which lauds Cincinnati, and is careful to note context.
Titling an article “St. Louis among most cost-competitive cities for business, report says” when the report in question says no such thing is a questionable decision for a newspaper of record. But this is not just a problem with the headline. The article itself is equally misleading, and it was not a headline writer who placed this story front and center on the Post-Dispatch’s website less than a week before a vote on multiple tax issues (where the city’s business climate is an issue).