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Value of KPMG 2014 costs index
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Highlights
- According to KPMG, business location costs are 9.3% cheaper in Quebec City, relative to the US average. This cost advantage stood at 5.8% in 2012.
- Quebec City ranks #1 worldwide among similarly-sized metropolitan regions (500,000 to 2 million inhabitants), up from #2 in 2012
- Quebec City ranks sixth worldwide among the 107 featured regions (all categories combined).
- Quebec City’s cost advantage is particularly evident in the R&D sectors (22.8% cheaper), digital services (21.9%), business services (19.2%) and manufacturing (4.3%).
Commentary
This morning, KPMG released the 2014 edition of Competitive Alternatives, its biennial study, which compares business location costs in 107 metropolitan regions in 10 countries. The Quebec City region scored well, with a 9.3% cost advantage relative to the US average. This is a net improvement since 2012, when this figure stood at 5.8%. The Quebec City region ranks sixth worldwide among the regions studied and ranks #1 among similarly-sized regions (500,000 to 2 million inhabitants). Among the 15 Canadian cities featured, only Moncton and Charlottetown edged out Quebec City. Quebec City now ranks third (up from sixth in 2012), outperforming Montreal, Winnipeg, Toronto, Edmonton and Vancouver.
KPMG’s study examines various cost factors associated with labour, facilities, transportation, utilities and tax in 19 operating sectors. In this regard, Quebec City offers a marked competitive advantage among similarly-sized metropolitan regions worldwide. In the R&D sector, the region ranks second worldwide thanks to cost advantages in the areas of clinical trials (25.3% cheaper), electronic systems development (24.6%) and biotechnology (19.3%). Digital services are another source of strength for Quebec City, which was #1 due to its competitive position in video game production (25.6%) and software development (18.8%). Quebec City also came in first for business services, supported by international financial services (24.6%) and shared service centres (14.9%). Although it only accounts for 6.4% of the regional economy, Quebec City’s manufacturing sector is also ranked #1 worldwide, with special emphasis on medical equipment (6.6%), pharmaceutical products (5.4%) and telecom equipment (5.4%).
Louis Gagnon
Senior Economist
Quebec International
