Deja vu all over again: That might be the Yogi-like first take in looking at Site Selection's 1999 business climate rankings, as North Carolina, Ontario and the United States all repeat at No. 1 among U.S. states, Canadian provinces and nations, respectively.

A closer look, however, reveals some shakeups in the SS rankings, which are based on four indicators from our exclusive New Plant database and a site selectors' poll (see pg. 999 for rankings and methodology).

And even one non-shakeup, North Carolina's No. 1 repeat, quietly defies much of what passes for conventional location wisdom. After all, a casual business headline scanner might conclude that big-bucks incentives are an intrinsic part of better business climates. But SS-polled corporate site selectors gave their No. 1 rank to North Carolina, a state that's built its business base with incentives that are primarily focused on work-force training and infrastructure -- incentives, not coincidentally, that endure, even as corporate facilities come and go. Here's a look at some other highlights from 1999's Site Selection business climate rankings.

Southeast, Midwest Top Regions
Mirroring recent years' rankings, the Southeast and Midwest dominated 1999's U.S. regional representation.

The Southeast had a particularly stellar 1999 showing, with 10 of the region's 11 states ranking in the top 25 business climates. Following in the footsteps of the North Carolina Tarheel planted at No. 1 were No. 4 Florida, No. 7 Georgia and No. 8 South Carolina, joined by six other regional representatives: No. 11 Kentucky, No. 13 Tennessee, No. 16 Alabama, No. 18 Virginia, No. 23 Mississippi and No. 24 Louisiana.

While the Southeast's high rankings underscore the region's transformation from the site selection backwater it was once considered, 1999's order also underscores the enduring business climate makeover of the Midwest -- ironically, the U.S. region arguably hurt worst when some site selectors' fancy initially took a sharp swing toward the Sunbelt.

The region's bruises, however, look fully healed. Eight Midwest states cracked this year's top 25 business climates, led by No. 3 Ohio and No. 6 Michigan, the latter the 1997 and 1998 winner of the Site Selection Governor's Cup, awarded to the state with the highest annual corporate facility total. Joining those two Midwest titans in 1999's top 25 were regional contemporaries No. 10. Illinois, No. 14 Indiana, No. 15 Minnesota, No. 19 Missouri, No. 22 South Dakota and No. 24 Iowa.

The usual business climate suspects also stood tall in the Southwest region, another major beneficiary of the Sun Belt location buzz. Perennial power Texas led the Southwest charge at No. 2, joined by No. 12 Arizona, No. 17 Oklahoma and No. 21 Nevada.

No. 9 New York and No. 20 Pennsylvania are 1999's top-ranked business climates from the Northeast, while No. 5 California is the lone representative from the Pacific region.

Four U.S. Newcomers
Four new states cracked 1999's top 25: No. 19 Missouri, No. 22 South Dakota, No. 23 Mississippi and No. 25 Louisiana.

Missouri, South Dakota and Mississippi's final business climate rankings closely parallel the ratings that site selectors bestowed on them in the SS survey. But South Dakota got a particularly big boost from one aspect of the SS ranking methodology that levels the state playing field in terms of size. With a total population of only some 750,000, South Dakota ranked No. 6 in 1996-98 new facilities per 1,000 sq. miles (2,600 sq. km.).

Louisiana, on the other hand, only ranked No. 33 with corporate executives, but jumped to No. 25 on the strength of its top 20 showings in all four statistical expansion indicators.

The Perception Picture
Perception played a major role in the rise of Florida and Alabama, who registered 1999's biggest state ranking upsurges.

Plumbing perception's roots, of course, is a task generally better left to psychics and lunatics, as assuming that role virtually ensures a popularity as long-lasting as a seat on Boris Yeltsin's cabinet. Nonetheless, perception certainly appears to have been a major aspect in Florida and Alabama's upward mobility.

Clearly the jackrabbit of 1999's top 10, Florida rose to No. 4 from No. 10, with much of that ascent attributable to its No. 2 rank in the site selectors' poll. That high executive rating is significant, suggesting that Florida may be winning, at least perceptually, its well-publicized battles in keeping infrastructure in synch with its seemingly unending surge of incoming residents.

Alabama, on the other hand, rose from No. 23 to 1999's No. 16 slot, an upgrade that likely reflects the substantial "what-have-you-done-for-me-lately?" component in business climate perceptions.

Recent events rule the perceptual roost in human endeavors, and it's highly unlikely that business location decisions totally defy that common-sense notion. Significantly, the time frame for this year's SS poll of corporate site selectors coincided with Alabama's landing Honda. And Honda's $400 million, 1,500-employee plant on a 1,350-acre (540-ha.) tract outside Lincoln is the kind of location whopper that leaves substantial site selection ripples in its wake. Says Samuel Addy of the University of Alabama's Center for Business and Economic Research, "The Honda deal is a great boon [for attracting] heavy industry for the whole state."

A Change in the Canadian Order
Ontario's 1999 grip on the No. 1 Canadian provincial ranking was particularly strong. In fact, Ontario's total score -- comprised of new/expanded facility totals and the executives' poll -- almost doubled the tally for British Columbia, which repeated as 1999's No. 2-ranked Canadian business climate.

Alberta's rise to No. 3, however, marked a small, but significant, shift in the Canadian guard: Quebec fell from No. 3 to No. 4 in 1999's rankings, a drop-off largely attributable to the perceptions of site selectors, some of whom continue to voice concerns over the questions raised by Quebec's strong separatist movement.

On the other hand, Motorola's recent decision to site its new, strategic R&D center in Montreal underscores the subjectivity inherent in reading business climates. "It (Quebec's possibly seceding from Canada) was never a factor and never discussed," says Micheline Bouchard, chair and president of Motorola Canada. (For more details on Motorola's new Canadian R&D center, see this issue's cover story on pg. 1014.)

Global Rankings: Fluke or Flux?
Given its eight straight years of unbroken growth, the United States certainly wasn't a surprising choice as the No. 1 global business climate.

Surprises, however, peppered other parts of 1999's national rankings. Australia, for example, moved up from No. 5 to No. 2, while New Zealand leapfrogged all the way from No. 21 to No. 6. Those two nations' rise may indicate that their economic stability within the Asia-Pacific has elevated their appeal as sites for regional operations.

Other Asia-Pacific nations' rankings, however, provide no clearly discernible pattern. Some of the global rankings, in fact, look like outright flukes in survey sampling. However, they may instead represent early signs of the world economy's sooner-than-expected rebound, which was underscored by a recent A.T. Kearney (www.atkearney.com) survey of multinationals' foreign direct investment (FDI) plans.

"Confidence in the global investment environment has risen in the last six months," says Paul Laudicina, vice president and managing director of Kearney's Global Business Policy Council, which conducts the semi-annual Global 1000 FDI survey. Specifically, 33 percent of Kearney-surveyed senior executives said the global economic climate was more positive than six months ago, and 75 percent said they planned to increase or maintain FDI activity.

Given such rapid changes, 2000's rankings may provide a more readily discernible picture of a world investment environment that's possibly settling after the convulsive changes of recent years.     SS