Featuring insights from Andreas Dressler, CSSC, Managing Director, Location Decisions, and Dennis Meseroll, CSSC, Co-Founder and Executive Director, Tractus Asia Limited

As companies plan expansions and relocations in 2026, new economic and policy dynamics are reshaping how location decisions are made. Looking back at 2025, it was clearly one of the most active and rapidly evolving periods for site selection in recent memory. The momentum didn’t slow down when we changed calendars.

At BLS & Co., we’re watching several key trends that will define the next wave of site selection activity across industries.

Manufacturing Momentum Continues
Ongoing trade tensions and new federal, state, and local incentives are reshaping the manufacturing landscape and continuing to pull advanced production back to U.S. soil. As companies rethink their global strategies, they’re also reengineering supply chains to be shorter, smarter, and more resilient.

According to Medius, 93% of U.S. manufacturers are planning to increase the pace of reshoring within their supply chain over the next two years.

Hotspots across the Southeast, Midwest, and Texas are seeing heightened competition for industrial sites and skilled workers as manufacturers race to secure capacity. At the same time, the sector is transforming at record speed, driven by technological innovation, artificial intelligence, shifting customer expectations, and persistent geopolitical uncertainty.

While reshoring to the U.S. continues, some types of manufacturing will remain offshore in Asia, but the location of facility footprints is changing dramatically. For example, hard and soft infrastructure investments have driven a change in the perception of India as a viable manufacturing destination for labor-intensive, as well as high-tech investments that won’t be reshored. India attracted US $76 billion in greenfield foreign direct investment (FDI) in 2024, making it the top destination in Asia-Pacific and the third largest globally, surpassing Germany and the UK. India's FDI grew 14% in 2024 while China's fell 29% for the second consecutive year, putting Chinese inflows 40% below their 2022 peak.

Ongoing geopolitical tensions between the U.S. and China have driven a strategic shift in manufacturing location decisions in Asia from “China+1” to “China-for-China” for those firms determined to compete in the world’s second-largest market, and “Exit China” for others. The U.S.-China rivalry is driving strong interest by non-U.S. firms with significant business in both the U.S. and China in locating in relatively geopolitically neutral Southeast Asia so they can serve both markets.

Reshoring is also likely to happen in Europe, although not to the same extent as in the U.S. Companies in energy- and labor-intensive sectors in Western European countries such as Germany and Italy will continue to look for location alternatives in Central and Eastern Europe, while also exploring opportunities further afield, including emerging locations in North Africa and Central Asia.

The past few years have exposed vulnerabilities in global supply chains. In 2026, the companies that win will be those that prioritize resilience and flexibility—building operations that can withstand disruption and adapt to change.

‍Life Sciences Manufacturing Continues to Accelerate

For many, life sciences evokes images of R&D labs and white-coated scientists, but life sciences expansion in recent years has been driven largely by manufacturing operations, including advanced biomanufacturing, pharmaceutical production, and specialized processing facilities.

In 2025 alone, companies including AstraZeneca, Eli Lilly and Company, Johnson &Johnson, Merck, Novartis, and Pfizer announced substantial capital investments across the globe, with a significant share directed toward large-scale manufacturing and hybrid manufacturing and R&D campuses.

In the United States, while North Carolina continues to be a powerhouse in life science manufacturing, other areas like Virginia and Alabama are winning investment as well, reflecting a broader geographic diversification of the sector. The current administration’s stance on tariffs appears to be accelerating announced investment from the sector, already in excess of $100 billion.

Globally, life sciences growth is no longer concentrated in a handful of legacy hubs. Established European markets such as Germany, the Netherlands, and Switzerland continue to expand, while fast-rising clusters across Asia are attracting investment tied to both domestic demand and global supply chain resilience.

For site selectors and policymakers, the implications are clear. Life sciences location decisions are increasingly shaped by access to specialized labor, reliable and scalable energy, transportation infrastructure, and regulatory certainty.

Energy and AI Impact
Energy and technology will continue to have major impacts on site selection in 2026. The rapid adoption of AI and other energy-intensive processes like advanced manufacturing and life sciences are driving a surge in power demand, testing the limits of grids and supply chains. Peak power demand is projected to increase 26% by 2035 in the United States, fueled largely by the growth of data centers and electrification initiatives.

Beyond the United States, Asian markets like Japan, China, Southeast Asia and India, as well as European markets are all facing increased stress on electrical grids and a need to develop solutions to meet long-term demand.

Although investment in energy infrastructure and generation is on the rise globally, the pace of this activity is still lagging demand, creating challenges for companies looking for locations where power is reliable and readily available. Asa result, power-intensive industries are increasingly focused on sites that can blend robust energy capacity with access to skilled talent.

In addition to the pressure to simply meet demand is pressure to do it with renewable energy. In the United States, twenty-five states plus the District of Columbia have renewable electricity portfolio standards. Beyond the United States, China is now requiring 80% renewable energy for new data centers in national hub regions by 2030.

The EU has set a binding target of at least 42.5% renewable energy by 2030. By 2028, the Corporate Sustainability Reporting Directive will extend to non-EU companies, requiring mandatory climate disclosures regardless of headquarters location.

Anticipating all the new requirements, companies are already adjusting investment and expansion strategies, making sustainability -- including both the availability and type of generating capacity -- a decisive factor in site-selection decisions globally, from datacenters to advanced manufacturing.

Not surprisingly, the mismatch between demand and availability is having an impact on prices. Recognizing the impact of high energy costs on their future competitiveness, a number of European governments have introduced measures to reduce energy expenses for companies. Italy, for example, announced a further €1 billion in spending to keep energy costs down. While these will provide temporary relief, greater investment in energy grids to accommodate renewable energy and reduce bottlenecks will take more time to translate into major improvements in energy reliability and costs across Europe.

As companies weigh these factors, energy reliability and cost will continue to influence which markets rise—or fall—on their radar. In 2026, successful global site selection will favor regions that combine infrastructure readiness with supportive policy environments and a clear capacity for innovation-driven growth.

Data Centers Dominate the Landscape
Data centers remain one of the fastest-growing subsectors, fueled by the rapid expansion of cloud computing, AI, and digital services.

JLL predicts that edge IT infrastructure and datacenters will become a $317 billion global market by 2026, more than doubling from $153 billion in 2022—a 107% increase.

Secondary markets, particularly in the U.S. Midwest and Southeast, are emerging as attractive alternatives to traditional hubs, as rising costs and capacity constraints in established regions push developers to explore new opportunities. That said, communities are becoming more averse to new datacenter development due to heavy demand for water and power, forcing some projects to reconsider development plans. In 2026, permitting timelines, community engagement, and energy access will be key to this continued development.

While NIMBY-ism is creating challenges for data center site selection in the U.S., this trend has yet to impact site location decision-making in much of Asia, where typical site, electricity, and telecommunications utility availability and quality considerations remain key.

The environment for data center investments in Europe is becoming more restrictive, with some locations (e.g., Amsterdam) putting an outright stop to data center investments. The Irish government has recently lifted its data center moratorium, provided that data centers take a proportion of their power from new renewable energy projects and feed energy back into the grid. This mirrors developments throughout Europe, with growing regulations on how data centers manage their energy needs. The availability of adequate sites remains a bottleneck for new data center development, and companies will increasingly need to look at alternatives (e.g., brownfield sites or chemical parks) that will accommodate data center investment.

In 2026, the most successful projects will be those that carefully balance technical requirements with local support, ensuring sites can accommodate growth both today and in the years to come.

A Mixed Outlook for White-Collar Projects

The impact of the changing office sector on site selection is far from settled. While some companies are consolidating footprints or adopting hybrid models, others are making targeted investments in collaborative, innovation-driven environments that support R&D, shared services, and headquarters functions.

At the same time, sectors such as media, financial services, and technology have reduced headcount and real estate footprints as business models and workforce needs evolve.

Regardless of whether physical footprints are expanding or contracting, talent remains the driving force behind location decisions. Employers continue to prioritize markets with strong pipelines of skilled professionals, affordable housing, and quality of life advantages that help attract and retain workers.

For states and cities competing for knowledge-economy investment, this shift is reshaping incentive strategies. Increasingly, successful jurisdictions are aligning incentives with how jobs are actually being created today, emphasizing workforce development and training, transportation and connectivity improvements, flexible work infrastructure, and placemaking investments that strengthen a region’s ability to attract and retain high-value talent.

… and Geopolitics Impact Everything

Every location strategy or site selection decision is now influenced in some way by geopolitical considerations. Whether it is global tariff policies that impact delivered duty paid manufacturing costs, government trade and procurement regulations forcing companies to consider local content requirements, or the more nuanced considerations about a location’s ability to minimize the risk that a company may be impacted by government attempts at economic coercion, geopolitical considerations will continue to have a significant impact on site location decisions in 2026.

We expect to see a further increase in “friendshoring,” where companies invest in countries aligned with their own home government (e.g. Chinese companies in Hungary or Slovakia). Despite the increase in global trade restrictions, free trade agreements (such as the recently concluded EU-Mercosur deal) will still influence where companies choose to invest to access promising markets.

Looking Ahead
Geopolitical uncertainty, accelerating AI adoption, and mounting pressure on energy infrastructure have become pivotal considerations in site selection. Whether its manufacturing reshoring, data center growth, white-collar shifts, or the evolution of life sciences, 2026 is shaping up to be one of the most complex and consequential years for global site selection in decades.

The companies that succeed will be those that act early and strategically to anticipate regulatory change, secure reliable and sustainable energy sources, and build flexibility into their location strategies. Likewise, the regions that rise to the top will be those that align infrastructure readiness, workforce development, and policy support with the evolving needs of modern industry.

Site selection was never only about finding the lowest-cost location, but, as these forces converge, corporate priorities are increasingly focused on identifying places that can support long-term resilience, innovation, and growth. In this environment, thoughtful planning, disciplined analysis, and a forward-looking approach will be essential for navigating the opportunities and risks ahead.