Singapore Leads in KPMG Study of Business Costs in Nine Industrialized Countries

Toronto, Canada (ots/PRNewswire) -

- Study Highlights Canada as the Lowest-Cost Country Among the G7

Singapore is the most cost-competitive place to do business among
nine industrialized countries, according to the 2006 edition of KPMG
LLP's bi-annual study Competitive Alternatives. Canada ranks second
overall, retaining its previous position as the lowest-cost country
among the G7 countries.

France and the Netherlands are the most cost-competitive European
countries studied, followed by Italy and the United Kingdom. The
United States, seventh in the rankings, has improved its competitive
position since 2004, assisted by the lower value of the U.S. dollar
relative to other major currencies. Eighth-ranked Japan has also
improved its competitiveness since 2004, overcoming its previous cost
disadvantage to ninth-ranked Germany.

KPMG's bi-annual Competitive Alternatives study measures 27 key
cost components - including labor, benefits, business facilities,
taxes and utilities - as applied to business operations in
industrialized countries. The 2006 edition of the study includes a
comprehensive analysis of 128 cities in nine countries - Canada,
France, Germany, Italy, Japan, the Netherlands, Singapore, the United
Kingdom and the United States. The study's basis for comparison is
the after-tax cost of startup and operation for 17 different types of
business, over a 10-year planning horizon.

"Selecting the best site for a business operation requires
balanced consideration of many factors, including business costs,
business environment, personnel costs, and quality of life issues,"
said Mark MacDonald, director with KPMG's Advisory practice in
Canada. "This study offers a comprehensive guide for comparing
business costs and contains valuable information for any company
seeking a cost advantage in locating international business
operations."

The 2006 edition notes several surprising results and trends since
the 2004 edition. Singapore, new to the study, has a business cost
advantage of more than 20 percent over the benchmark United States
results. With GDP per capita now on par with some western European
nations, Singapore is the first newly industrialized country to be
included in Competitive Alternatives.

Among the returning countries, business cost differentials have
narrowed since 2004, and all G7 countries now have costs within eight
percent of the U.S. results. Within North America, the strengthening
of Canada's currency has lessened the gap between Canadian and US
costs. In Europe, the Euro-based countries have all gained ground
against the United Kingdom. And Japan's competitive cost position has
improved significantly, assisted by the weakening of the yen and
improvements in local business costs.

Rankings and relative cost indices are illustrated in the
following chart. The benchmark cost index (U.S. (equal sign) 100) is
defined as the average of nine representative U.S. cities.

-----------------------------------------
Cost-Competitiveness:
2006 Rankings by country
-----------------------------------------
Country Cost Index Rank
-----------------------------------------
Singapore 77.7 1
-----------------------------------------
Canada 94.5 2
-----------------------------------------
France 95.6 3
-----------------------------------------
Netherlands 95.7 4
-----------------------------------------
Italy 97.8 5
-----------------------------------------
United Kingdom 98.1 6
-----------------------------------------
United States 100.0 7
-----------------------------------------
Japan 106.9 8
-----------------------------------------
Germany 107.4 9
-----------------------------------------
Source: KPMG's 2006 Competitive
Alternatives Study
-----------------------------------------

For international cities with populations of more than two
million, Singapore ranks as the most cost-competitive overall.
Montréal is the most cost-competitive large city in the G7, followed
by Atlanta, Toronto, Tampa, and Amsterdam. The city with the highest
business costs is New York, followed by Frankfurt, London and San
Jose.

Among medium-sized and smaller cities included in the study, the
lowest- cost city is Sherbrooke, Canada, while in Europe, the
lowest-cost city is Montpellier, France.

Commenting on the cost competitiveness of cities in the study,
KPMG's Mark MacDonald, said: "There is often a tradeoff between
larger cities with deeper labor pools and better support
infrastructure, and smaller cities, which tend to have lower labor
and facility costs."

According to the study, labor costs typically represent the
majority of location-sensitive costs, for both manufacturing and
non-manufacturing operations. Facility costs represent the second
largest location-sensitive cost factor, accounting for 10 to 22
percent of costs for manufacturing operations and 4 to 13 percent for
non-manufacturing operations. Taxes are another key factor,
representing 3 to 13 percent of total location-sensitive costs.

The KPMG analysis is based on cost information collected primarily
between July 2005 and January 2006. Taxes reflect tax rates in effect
on January 1, 2006.

About Competitive Alternatives

KPMG's 2006 Competitive Alternatives study provides an independent
comparison of international business location costs in 128 cities
around the world. The study enables businesses executives to take a
quick, initial scan of how business costs compare among a variety of
cities in leading industrialized countries. It also assists KPMG
professionals and economic developers in their work with businesses
considering relocation, and enables policy makers to help determine
the impact of a proposed tax and/or incentive policy change on the
cost-competitiveness of their jurisdiction in relation to others.

The study is available online at www.CompetitiveAlternatives.com

About KPMG

KPMG is the global network of professional services firms whose
aim is to turn knowledge into value for the benefit of their clients,
people and the capital markets. With nearly 94,000 people worldwide,
KPMG member firms provide industry-focused audit, tax, and advisory
services from more than 717 cities in 148 countries.

KPMG's member firms assist clients as they consider expanding,
relocating or consolidating their business activities. More than 100
KPMG professionals throughout the world offer a variety of global
location and expansion services, ranging from strategic planning, to
site analysis, to determining the availability of business
incentives.

KPMG's Web site is located at www.kpmg.com

ots Originaltext: KPMG International LLP
Im Internet recherchierbar: http://www.presseportal.de

Contact:
Media Contacts: Sharon Godsell, Media Relations, KPMG, Tel:
+1-416-777-3533, sgodsell@kpmg.ca, Julie Bannerjea, Senior Manager,
Media Relations, KPMG, Tel: +1-416-777-3243, jbannerjea@kpmg.ca


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