MANKATO — The Mankato area's low office and energy costs and productive workforce make it among the cheapest places to do business in the Upper Midwest.
The region had the fifth-lowest cost of doing business among the 29 Metropolitan Statistical Areas measured by Moody's.
"This continues to position the community as a place where businesses can find success," said Jonathan Zierdt, president and CEO of Greater Mankato Growth.
The ranking assigns an overall index number to each city based on the costs of office rent, energy, labor and state and local taxes. Mankato ranked 81, meaning it was 19 percent below the national average for the cost of doing business. The cost of labor is given the most weight in the rankings.
The Mankato-North Mankato MSA, which includes all of Blue Earth and Nicollet counties, ranked No. 1 in lowest office rent, No. 7 in energy costs, 13th in labor costs and 14th in taxes among the 29 cities studied in Minnesota, Wisconsin, Iowa, North Dakota and South Dakota.
Zierdt said the lower labor costs for the Mankato area — and for all of the Midwest compared to the rest of the nation — is not strictly a measurement of how much workers are paid. Instead Moody's calculates the relationship between labor costs and productivity.
"So it's really an efficiency and productivity measure." Zierdt said the Midwest, in general, can better promote the high productivity and work ethic of workers when trying to attract businesses.
Ranking the lowest in office rent costs might suggest a glut of empty office space in the Mankato area, but Zierdt said that's not the case. "When you talk to people in that business, their (office space) occupancy is very high — in the 90s (percent)."
He said the office rent cost category measures not just rents being paid but also things like the overall property costs and construction costs.
The other regions in the Midwest finishing with lower costs of doing business, starting at No. 1, were: Rapid City, Sioux Falls, Sioux City, Bismarck.
The three most expensive Upper Midwest cities for doing business were Minneapolis/St. Paul, Milwaukee and Wausau.
When looking at all of the 384 MSAs in the nation, Mankato ranked as the 64th lowest cost place to do business — putting it in the top 17 percent nationally for affordability.
The Mankato region was recently ranked as the 10th best on Fobes Best Small Metros for Business and Careers list, which included the 184 MSAs in the nation with populations of fewer than 250,000.