Cost of Doing Business

Based on Moody’s Analytics 2012 North American Business Cost Review, the Cost of Doing Business in the Mankato-North Mankato Metropolitan Statistical Area (MSA) is lower than the national average (represented by an index value of “100”). With an index value of 81, the Mankato-North Mankato MSA’s Cost of Doing Business is 81% of the national average (or 19% below the national average), giving it the 64^th Lowest Cost of Doing Business among all 384 MSAs in the U.S. and putting it in the top 17% nationally.

The Mankato –North Mankato MSA is also competitive with other MSAs in the Upper Midwest, with the 5^th Lowest Cost of Doing Business among the 29 MSAs in the Upper Midwest states of Minnesota, Wisconsin, Iowa, North Dakota and South Dakota. According to Moody’s Analytics, Overall Cost of Doing Business is calculated using a three year moving average, to safeguard against volatility. The information below represents 2008 through 2010.

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Overall Cost of Doing Business - Upper Midwest

Source: Data compiled by Greater Mankato Growth from Moody’s Analytics 2012 North American Business Cost Review 

Breakdown

In Moody's Analysis, four factors contribute to the overall Cost of Doing Business - Cost of Office Rent, Energy Costs, State & Local Taxes and Unit Labor Cost. The Mankato-North Mankato MSA ranks in the top 50% or higher for all factors, compared to the 28 other Upper Midwest MSAs.  In paraphrasing Moody’s Analytics:

• Unit Labor Cost, which is the largest component of the overall Cost of Doing Business, calculates labor compensation per dollar output, utilizing a variety of sources, including the Bureau of Labor Statistics and National Compensation Survey. Growth in retail trade, construction, real estate and government are not influenced by labor costs, and therefor are not included in the Labor Cost calculation.
• State and Local Taxes data is derived from the Census Bureau's Annual Survey of State Government Finances & Census of Governments.
• Energy Costs compares the average commercial and industrial electricity costs, with the national average, utilizing data from the Energy Information Administration, a division of the Department of Energy.  
• Cost of Office Rent was based on average gross rent per square foot for class "A" office space data from Colliers International.      

Source: Data compiled by Greater Mankato Growth from Moody’s Analytics 2012 North American Business Cost Review