LOCATION FACTORS FOR INDUSTRIES

AVAILABILITY OF RAW MATERIALS Factories need to be close to the raw materials needed for production, especially if they rely on resources that go bad (vegetables) or are expensive to transport (lumber)

LOCATION OF MARKETS Good to be located near to the majority of a product’s customers Minimizes delivery costs Minimizes time to transport Gives competitive advantage over others

AVAILABILITY OF FRESH WATER AND POWER Most manufacturing operations require water and electricity Best if water can come straight from a river or lake Cheap electricity is important

LABOUR SUPPLY In the past, companies sought large, low-cost labour force Now companies locate in areas with universities, colleges and apprenticeship program to provide skilled labour Low-cost, low-skilled jobs have moved to Mexico due to NAFTA and Canadian companies have had to adapt to compete

TRANSPORTATION Companies need fast and efficient transportation Rail lines, large bodies of water, major highways are all important location factors

POLITICAL FACTORS Local governments can make it easy or difficult for factories to operate so a good business climate is important when selecting a location Direct decisions governments make include taxation, tax credits, land provision Indirect decisions governments make include new highways, canals, environmental laws

CIRCUMSTANCE Other less obvious location factors such as where the entrepreneur wants to live, location of other industries, opportunities for expansion