US Corporate Headquarters Sweepstakes: Winners and Losers in 2023
The corporate headquarters sweepstakes in the US has undergone a sea change over the years. In the late 1950s, New York City and Chicago dominated the Fortune 500 index, accounting for almost half of the list. However, the inflationary age has brought a significant transformation, with cities in the southeast and southwest, known for their low cost of living and lack of taxes on businesses, taking center stage in the race. This article explores the winners and losers of the headquarters sweepstakes in America in 2023.
Don’t Mess with Texas
New York City remains the top city for Fortune 500 companies. However, Texas seems to have the greatest number of Fortune 500 companies of any state for the second year in a row, with $2.6 trillion in revenue and $226.5 billion in profit. Houston is the second most popular headquarters city for Fortune 500 firms, housing 22 companies. Energy remains the dominant sector in Texas, with 26 of the 55 companies based there operating in this industry.
The state’s low cost of living and lack of taxes on businesses make it a magnet for corporations. ExxonMobil, the largest company in Texas, has relocated some of its upper management’s luxury suite to its preexisting Houston campus to tighten its belt during the inflationary age.
Atlanta and Dallas are Next Up
Atlanta and Dallas have emerged as second and third place winners in the corporate headquarters sweepstakes in 2023. Atlanta, which was the fourth-place city just three years ago, gained a spot, hosting 15 companies. While the city might offer CEOs a more affordable lifestyle, the community isn’t growing. Fortune 500 companies in Atlanta aren’t trickling much down to generate a thriving Black middle or working class, reported Fortune’s Ellen McGirt.
Dallas, having gone from hosting nine to eleven companies in the last three years, consistently ranks as the fifth most populous place for Fortune 500 companies. Comparatively, Philadelphia, which was fifth in 1995, has lost its spot, slipping to sixth place.
A Look Back and a Nod to the Losers
In the 1950s, New York dominated as home to 136 out of the 500 companies, while Chicago housed 47, Pittsburgh 22, and Detroit and Cleveland had 18 and 16 respectively. However, in 1995, New York and Chicago remained at the top, but with only 49 and 17 companies. Over the past three years, New York City has consistently held the first place while Chicago continues to wane.
Pittsburgh, which has a four-way tie for seventh place, has seen its number of Fortune 500 companies shrink by over 60%. The prominent spots that Detroit, Cleveland, and Chicago held in the 1957 list have all declined by over 70%.
The Bargains for Corporate Headquarters Lie South
The low cost of living and lack of taxes on businesses in the southern US make it an attractive destination for corporations. Texas remains the leader of the pack, with Houston and Dallas rising up on the list of preferred destinations for the Fortune 500. While New York City still dominates as the most favored city, the ongoing commercial real estate crisis poses a long-term headwind to its top spot. Companies are increasingly relocating to less expensive areas.
Conclusion
The corporate headquarters sweepstakes in the US is undergoing a significant transformation, with the southeast and southwest challenging the dominance of cities like New York and Chicago. The lack of taxes on businesses and low cost of living in the south have made it an attractive destination for corporations. While some cities like Atlanta have gained in the race, their presence doesn’t always correlate with economic growth for locals. For now, the bargains for corporate headquarters lie south.
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