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).

Report: Saint Louis, Kansas City Not Among Most Cost-Friendly Cities for Business

Joseph Miller