Study: Honolulu costly for some industries... but not others - Hawaii News Now - KGMB and KHNL

Study: Honolulu costly for some industries... but not others

HONOLULU (HawaiiNewsNow) - The consulting firm KPMG says the cost of doing business is higher in Honolulu than any other U.S. city.

But a close examination of the detailed data finds Honolulu is an affordable location for research and development, including software design, biotech and clinical trials.

The international auditing giant researched costs, sales and profits in New York, Los Angeles, Chicago and Dallas, averaged them together, and assigned the value "100" to the results.

Then it compared each individual city. A value of 101 for costs meant 1% higher costs than the four-city average.

The five most expensive cities, in order, were Honolulu (107), Anchorage (106), San Francisco (104), New York (102) and Los Angeles (101).

KPMG said Tokyo, famously one of the costliest cities in the world, would have gotten a rating of 109, and Osaka 106, had these cities been in the report.

The deep data tells a different story about Honolulu, however.

The number for each city is itself an average of findings from more than a dozen separate industries including many that would likely not be present in a remote location like Honolulu: aerospace, chemicals and other kinds of manufacturing.

And those were the high numbers that raised Honolulu's average: 113 for metal machining, 123 for plastics.

Honolulu's ratings for high-tech industries were mostly lower: 101 for biotech, 100 for software design, 93 for clinical trials, with a net research and development average score of 99.

For net profit after tax, Honolulu came in with a better score that San Francisco or Los Angeles, and about the same as Seattle.

Comparative studies of U.S. cities and states often skew results for Honolulu and Hawaii because the methodology doesn't account for the unusual composition of the island economy.

An annual comparison of home prices by another firm is based on homes with large lots and two-car garages that are hard to find at any price in Honolulu.

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