When it comes to Texas being a top state for business, we guess the jury's out. Photo via Getty Images

Texas economic development boosters are crowing about a new top-in-the-nation ranking. But they’re probably frowning about a different business ranking that’s mediocre.

First, the good news.

Business Facilities magazine just named Texas the 2023 State of the Year in recognition of its business climate, economic development leadership, and “blockbuster” year for capital investment and job creation. It’s the fifth time that Business Facilities has crowned Texas as the top state.

“Texas moves at the speed of business,” Gov. Greg Abbott said in a news release. “As recognized by Business Facilities magazine, Texas leads the nation for corporate relocations, business expansions, and job creation.”

“With the best business climate in the nation, leading investments in education and workforce development, and our young, skilled, diverse, and growing workforce, Texas is poised to lead the nation in 2024,” the governor added.

Additionally, Texas again appears on WalletHub's annual list of "Best States to Start a Business" — but ranks lower than last year. The Lone Star State ranked No. 8 this year compared to last year's No. 3 spot. This ranking looked at business environment, access to resources, and business costs across 25 relevant metrics by analyzing data from U.S. Census Bureau, Bureau of Labor Statistics, and other resources.

Now, the not-so-good news.

Texas landed at No. 32 on Forbes Advisor’s new list of the best states to start a small business in 2024. The Lone Star State received especially low marks economy, workforce, and business climate, but fared better in two other categories: business costs and financial accessibility.

Topping the Forbes Advisor list was North Dakota, followed by Indiana, Arkansas, South Dakota, and North Carolina.

Texas recently was awarded three other No. 1 business climate rankings, though: Best Business Climate in the U.S. by Business Facilities in June, Best Business Climate in the U.S. by corporate executives in September, and Top Business Climate in the U.S. by Site Selection Magazine in November.

“In a state the size of Texas, business is not just finding a home in the metros. A laser focus by economic developers across the state to foster established businesses as well as innovative startups is paying off for communities of all sizes,” Anne Cosgrove, editorial director of Business Facilities, says in a news release.

The magazine covers corporate site selection and economic development.

Other contenders for 2023 State of the Year were:

  • Arizona
  • Florida
  • Georgia
  • Indiana
  • Missouri
  • Nevada
  • North Carolina
  • Tennessee
  • Utah
  • Virginia
Texas has been known for ages as a business-friendly state, but one recent report suggests it might be falling from grace. Photo via Getty Images

Texas' business friendliness gets mixed reviews from 2 recent reports

lone star standings

It’s a tale of two views of Texas’ business-friendly reputation. For the first time ever, the Lone Star State has fallen out of the top five in CNBC’s annual ranking of the best states to do business. Meanwhile, Texas tops Business Facilities’ new ranking of the best state business climates.

On July 11, CNBC released the 2023 edition of its ranking of the top states for doing business. The ranking puts Texas at No. 6, leaving the Lone Star State out of the top five for the first time since CNBC launched its study in 2007. Texas appeared at No. 5 in 2022 and No. 4 in 2021. The state finished first in 2008, 2010, 2012, and 2018.

For the second consecutive year, North Carolina leads the CNBC ranking, thus “solidifying its position as an economic powerhouse,” according to the Economic Development Partnership of North Carolina.

Despite dropping out of the top five, CNBC acknowledges that Texas remains an economic powerhouse.

Texas grabs CNBC’s No. 2 spot, behind Florida, for the best state economy. And the state witnessed year-over-year job growth of four percent through May, the highest rate of any state. Furthermore, Texas ties with California for access to capital, the study says, and snags the No. 2 spot in the workforce category.

Texas’ fall this year includes a slide from No. 15 to No. 24 in the infrastructure category. CNBC mentions the 2021 wintertime collapse of the state’s electric grid in its explanation of the nine-spot drop.

Other knocks against Texas:

  • A decline from No. 21 to No. 35 in the education category.
  • A dip from No. 12 to No. 16 in the cost-of-doing-business category.
  • A plunge from No. 14 to No. 22 for cost of living.
  • A bottom-of-the-barrel ranking in the life, health, and inclusion category, down from No. 49 last year.

In an email to CNBC, an unnamed spokesman for Gov. Greg Abbott shrugged off this year’s sixth-place showing.

“People and businesses vote with their feet, and continually they are choosing to move to Texas more than any other state in the country,” the spokesman wrote.

The spokesman cited the state’s national lead in job creation, attracting more than 280 new corporate headquarters since 2015, and its status as a perennial front-runner in economic development projects.

“Texas remains number one because people and businesses are choosing our state over any other for the unmatched competitive advantages we offer: no corporate or personal income taxes, a predictable regulatory climate, and a young, skilled, diverse, and growing workforce,” the spokesman wrote.

While Texas didn’t fare as well in this year’s CNBC study, it can brag about its 2023 designation as Business Facilities magazine’s state with the best business climate. In second place: North Carolina.

“The strength and sustained momentum of the Texas economy made the state a clear choice for [No. 1] in this year’s rankings,” Anne Cosgrove, editorial director of Business Facilities, says in a June 26 statement. “Taking the top spot this year is based not only on the impressive capital investment and job creation numbers, but also for diversity of industries, robust infrastructure, and a business-friendly regulatory and tax climate.”

Abbott took the opportunity to publicize the No. 1 ranking from Business Facilities.

“When businesses succeed, so do Texans — and our business climate ensures that Texas continues to offer world-class educational opportunities, good-paying careers to support families, and endless possibilities to prosper,” Abbott says in a news release.

Houston's moving on up in the worlds of economics and startup activity. Photo by Tim Leviston/Getty Images

Houston ranks high on lists for startup ecosystems and economic growth potential

We're No. 4!

The number four appears to be a sign of good fortune for Houston.

A new ranking from Business Facilities magazine places Bayou City at No. 4 for economic growth potential among large metro areas and at No. 4 for the country's best startup ecosystems.

Regarding the No. 4 ranking for economic potential, Susan Davenport, senior vice president of economic development for the Greater Houston Partnership, says Houston's industrial diversity has helped the region weather downturns in certain economic sectors "and now has us on a solid growth trajectory."

"The region's steady population increases, coupled with our relatively low costs of living and doing business, bode well for our economic growth potential reflected in this ranking," Davenport says.

Houston's status as the one of the top locations for Fortune 1000 headquarters in the U.S. elevates the region's position as a hub where both large and small companies can prosper, she adds.

Houston appeared at No. 1 in Business Facilities' 2018 ranking of the top large metros for economic growth potential. Representatives of Business Facilities couldn't be reached to explain why Houston dropped three places from 2018 to 2019.

Last year, the magazine pointed out that Houston's economy extends far beyond its standing as the Energy Capital of the World.

"The nation's fourth-largest city has a dynamic, diversified economy that is brimming with innovation, technology, and entrepreneurship," said the magazine, citing advantages such as Houston's strong manufacturing base, enormous healthcare presence, and storied aerospace legacy.

The magazine went on to hail Houston's "distinctly favorable business climate."

"The region benefits from a skilled workforce, world-class infrastructure and transportation system, and a pro-business environment that stimulates rather than stifles business growth," Business Facilities noted.

As for the No. 4 ranking in this year's Business Facilities startup category, Davenport says this indicates the recent work of the Houston Exponential initiative to foster the local startup environment is paying off.

Houston Exponential, established in 2017, seeks to make Houston a top 10 innovation ecosystem, generate $2 billion in venture capital annually, and create 10,000 new tech jobs a year by 2022.

Last October, Houston Exponential announced it had collected $25 million for its first venture capital fund. Making financial commitments to the fund were Insperity, Chevron, Shell, Quanta Services, Westlake Chemical, The Plank Cos., PROS, H-E-B, and Camden Property Trust.

"Factor in the demand being satisfied by a number of new incubators and accelerators, plus the four-mile Innovation Corridor running through the heart of the city and anchored by The Ion, and we're seeing momentum on a scale like never before," Davenport says.

In Houston's Midtown, Rice University is transforming the historic Sears building into The Ion, which will serve as an innovation hub designed to cultivate collaboration among startups, corporations, universities, and other elements of the local business community. It's the first development in Houston's evolving innovation district.

"The Midtown innovation district is an embodiment of our shared community vision to give professionals and families a means of seizing opportunity as Houston continues to grow as a leading city in technology," says Matt Thibodeaux, executive director of Midtown Houston.

Here is Business Facilities' 2019 list of the top 10 places for economic growth potential among large U.S. metros:

  1. Atlanta
  2. San Antonio
  3. Phoenix
  4. Houston
  5. Orlando, Florida
  6. Austin
  7. Raleigh-Durham, North Carolina
  8. Las Vegas
  9. Albuquerque, New Mexico
  10. Kansas City, Missouri

Here is Business Facilities' 2019 list of the 10 places with the best startup ecosystems in the country:

  1. Austin
  2. Denver
  3. New York City
  4. Houston
  5. San Jose, California
  6. Orlando, Florida
  7. Nashville, Tennessee
  8. Atlanta
  9. Raleigh-Durham, North Carolina
  10. Salt Lake City
"The Houston of today looks like the United States of tomorrow," says Susan Davenport, senior vice president of economic development at the Greater Houston Partnership. Photo by Zview/Getty Images

Houston deemed one of the top 'Cities of the Future' in North America

Bragging rights

Watch out, world. Here comes Houston.

Houston ranks fifth on a new 2019-20 list of the 10 North American Cities of the Future produced by the fDi Intelligence division of the Financial Times. New York grabbed the No. 1 spot, followed by San Francisco, Toronto, and Montreal. Following Houston were Chicago; Boston; Los Angeles; Palo Alto, California; and Seattle.

The ranking is based on data in five categories:

  • Economic potential
  • Business friendliness
  • Human capital and lifestyle
  • Cost effectiveness
  • Connectivity

Susan Davenport, senior vice president of economic development at the Greater Houston Partnership, says Houston's "ethnically and culturally diverse population" coupled with its "robust and globally connected economy" help form a solid foundation for the city's future.

The North American Cities of the Future ranking is certainly not the only such accolade that Houston has garnered. Hailing Houston as "the American city of the future," Resonance Consultancy, a consulting firm, ranks Houston the 11th best large city in the U.S.

"Positive rankings and recognition like this help us continue to attract the best and brightest minds both domestically and around the world," Davenport says. "Houston has long been a place that solves the world's most complicated problems — from putting humans on the moon to pioneering open-heart surgery. But we make a conscious choice to measure ourselves not on past accomplishments but on what we do next."

Davenport cites Houston's vibrant startup scene, 21 Fortune 500 companies, and burgeoning innovation corridor, along with the presence of the world's largest medical complex, as helping position the city for economic growth.

She also mentions the fact that nearly one-fourth of local residents are foreign-born and that more than 145 languages are spoken. In April 2019, personal finance website WalletHub named Houston the most diverse city in the U.S.

"In short, the Houston of today looks like the United States of tomorrow," Davenport says.

In a March 2019 report, the Center for Houston's Future noted that Houston's economic growth — namely in the construction, healthcare and IT sectors — depends heavily on the continued influx of immigrants. Immigrants already make up nearly one-third of the region's workforce, the report says.

Between 2016 and 2036, almost 60 percent of all jobs added in the region will be filled by foreign-born workers, the report indicates.

Also on the international front, more than 5,000 Houston companies do business abroad, Davenport says, and more than 500 foreign-owned companies have invested in Houston in the past decade.

As Houston looks toward the future, business leaders will continue to diversify the economy through such sectors as life sciences, advanced manufacturing, and technology, according to Davenport. In addition, business leaders will keep driving the transition from traditional fossil fuels to "new energy" sources (like wind and solar), she says.

"Houston's future is a bright one," Davenport says. "Our young and well-educated workforce, coupled with targeted infrastructure investments, will help us become a hub for innovation in the years ahead."

Business Facilities magazine agrees with that assessment. In July 2018, it ranked Houston the No. 1 metro area for economic growth potential, stressing that the region's economy has expanded beyond Big Oil and that it's brimming with "innovation, technology, and entrepreneurship."

"Houston has a distinctly favorable business climate. The region benefits from a skilled workforce, world-class infrastructure and transportation system, and a pro-business environment that stimulates rather than stifles business growth," the magazine says.

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New report shows surge in startup activity in Houston and across Texas

by the numbers

Houston and the rest of Texas are experiencing a boom in the creation of startups.

One barometer of growth in startup activity: The Houston metro area saw a 92 percent rise from 2024 to 2025 in the number of account applications submitted to Bluevine, a banking platform for small businesses.

New data from Bluevine also shows healthy year-over-year growth in account applications submitted by entrepreneurs in Texas’ three other major metros:

  • 242 percent growth in the San Antonio area
  • 153 percent growth in the Austin area
  • 28 percent growth in Dallas-Fort Worth

Further evidence of Texas’ uptick in business creation comes from a new state-by-state analysis of U.S. Census Bureau data by digital mailbox provider iPostal1.

From 2019 to 2024, the number of new business applications jumped 60 percent in Texas, according to the iPostal1 analysis. Wyoming tops the list, with a five-year growth rate of 216 percent.

“The U.S. has no shortage of ambition, but opportunity isn’t spread evenly,” says Jeff Milgram, founder and CEO of iPostal1. “In states like New York, Florida, and Texas, entrepreneurship is booming — people are starting businesses, taking risks, and finding opportunity.”

“Other states are still catching up,” Milgram adds. “Sometimes it’s access to funding, sometimes local policy, or just the confidence that new ventures will be supported.”

Women own many of the new businesses sprouting in Texas, according to a new analysis of 2024-25 data from the U.S. Small Business Administration. The analysis, done by SimpleTiger, a marketing agency for software-as-a-service (SaaS), shows Texas ranks eighth for the highest concentration of women entrepreneurs (109 per 1,000 female residents) among all states. That rate is three percent higher than the national average.

“Women entrepreneurs are no longer a side story in small business growth; they’re a leading indicator of where local economies are expanding next,” SimplyTiger says. “When women-owned business density is high, it usually signals stronger access to customers, networks, and startup pathways that make it easier to launch and keep going.”

In a December news release, Gov. Greg Abbott highlights Texas’ nation-leading job gains over the past 12 months, driven by employers small and large.

“From innovative startups to Fortune 500 corporations, job-creating businesses invest with confidence in Texas,” Abbott says. “With our strong and growing workforce, we will continue to expand career and technical training programs for better jobs and bigger paycheck opportunities for more Texans.”

Houston poised to add 30,900 new jobs in 2026, forecast says

jobs forecast

Buoyed by the growing health care sector, the Houston metro area will add 30,900 jobs in 2026, according to a new forecast from the Greater Houston Partnership.

The report predicts the Houston area’s health care sector will tack on 14,000 jobs next year, which would make it the No. 1 industry for local job growth. The 14,000 health care jobs would represent 45 percent of the projected 30,900 new jobs. In the job-creation column, the health care industry is followed by:

  • Construction: addition of 6,100 jobs in 2026
  • Public education: Addition of 5,800 jobs
  • Public administration: Addition of 5,000 jobs

At the opposite end of the regional workforce, the administrative support services sector is expected to lose 7,500 jobs in 2026, preceded by:

  • Manufacturing: Loss of 3,400 jobs
  • Oil-and-gas extraction: Loss of 3,200 jobs
  • Retail: Loss of 1,800 jobs

“While current employment growth has moderated, the outlook remains robust and Houston’s broader economic foundation remains strong,” GHP president and CEO Steve Kean said in the report.

“Global companies are choosing to invest in Houston — Eli Lilly, Foxconn, Inventec, and others — because they believe in our workforce and our long-term trajectory,” Kean added. “These commitments reinforce that Houston is a place where companies can scale and where our economy continues to demonstrate its resilience as a major engine for growth and opportunity. These commitments and current prospects we are working on give us confidence in the future growth of our economy.”

The Greater Houston Partnership says that while the 30,900-job forecast falls short of the region’s recent average of roughly 50,000 new jobs per year, it’s “broadly in line with the muted national outlook” for employment gains anticipated in 2026.

“Even so, Houston’s young, skilled workforce and strong pipeline of major new projects should help offset energy sector pressures and keep regional growth on pace with the nation,” the report adds.

The report says that even though the health care sector faces rising insurance costs, which might cause some people to delay or skip medical appointments, and federal changes in Medicare and Medicaid, strong demographic trends in the region will ensure health care remains “a key pillar of Houston’s economy.”

As for the local oil-and-gas extraction industry, the report says fluctuations and uncertainty in the global oil-and-gas market will weigh on the Houston sector in 2026. Furthermore, oil-and-gas layoffs partly “reflect a longer-term trend as companies in the sector move toward greater efficiency using fewer workers to produce similar volumes,” according to the report.

Construction underway on first-of-its-kind 3D-printed community in Houston

Building a Sustainable Future

Houston is putting itself front-and-center to help make sustainable, affordable housing a reality for 80 homeowners in an innovative scalable housing community. Developer Cole Klein Builders has partnered with HiveASMBLD to pioneer what’s touted as the world’s first large-scale, one-of-a-kind, affordable housing development using 3D printing technology — merging robotics, design, and sustainability.

Located across from Sterling Aviation High School, near Hobby Airport, Zuri Gardens will offer 80 two-bedroom, two-bathroom homes of approximately 1,360 square feet, situated in a park-like setting that includes walking trails and a community green space.

Homes in Zuri Gardens will hit the market in early summer of 2026. Final pricing has yet to be determined, but Cole Klein Builders expects it to be in the mid-to-high 200s.

Interestingly, none of the homes will offer garages or driveways, which the developer says will provide a cost savings of $25,000-$40,000 per home. Instead of parking for individual units, 140 parking spaces will be provided.

Each two-story home is comprised of a ground floor printed by HiveASMBLD, using a proprietary low-carbon cement alternative by Eco Material Technologies that promises to enhance strength and reduce CO2 emissions. The hybrid homes will have a second floor built using engineered wood building products by LP Building Solutions. Overall, the homes are designed to be flood, fire, and possibly even tornado-proof.

The "Zuri" in Zuri Gardens is the Swahili word for “beautiful,” a choice that is fitting considering that the parks department will be introducing a five acre park to the project — with 3D-printed pavilions and benches — plus, a three-acre farm is located right across the street. The Garver Heights area is classified as a food desert, which means that access to fresh food is limited. Residents will have access to the farm’s fresh produce, plus opportunities to participate in gardening and nutrition workshops.

zuri gardens 3d-printed housing community First large-scale affordable housing project of 3D-printed homes rises in Houston Zuri Gardens is getting closer to completion. Courtesy rendering

Cole Klein Builders created Zuri Gardens in partnership with the Houston Housing Community Development Department, who provided infrastructure reimbursements for the roads, sewer lines, and water lines. In return, CKB agreed to push the purchase prices for the homes as low as possible.

Zuri Gardens also received $1.8 million dollars from the Uptown Tourism Bond, 34 percent of which must be used with minority-owned small businesses. Qualified buyers must fit a certain area of median income according to HUD guidelines, and homes must be owner-occupied at all times. Zuri Gardens already has an 800-person waitlist.

“They’re trying to bridge that gap to make sure there is a community for the homebuyers who need it — educators, law enforcement, civil workers, etc.,” Cole Klein Builders’ co-principal Vanessa Cole says. “You have to go through a certification process with the housing department to make sure that your income is in alignment for this community. It has been great, and everyone has been really receptive.”

Cole has also brought insurance underwriters to visit the site and to help drive premiums below regular rates for Houston homeowners, as claim risks for one of the 3D homes are extremely low.

Tim Lankau, principal at HiveASMBLD, notes that the 3D hybrid design allows for a more traditional appearance, while having the benefits of a concrete structure: “That’s where the floodwaters would go, that’s where you can hide when there’s a tornado, and that’s where termites would eat. So you get the advantages of it while having a traditionally-framed second floor.”

It’s important to note that Zuri Gardens is not located in a flood prone area, nor did it flood during Hurricane Harvey — being flood-proof is merely a perk of a cement house. The concrete that Eco Material Technologies developed is impervious. The walls are printed into hollow forms, which house rebar, plumbing, and accessible conduits for things like electrical lines and smart house features. Those walls are then filled with a foamcrete product that expands to form a “monolithic concrete wall.”

David McNitt, of Eco Material Technologies, explains that his proprietary concrete is made of PCV, and contains zero Portland cement. Instead, McNitt’s cement is made from coal ash and is 99 percent green (there are a few chemicals added to the ash). Regardless, it’s made from 100 percent waste products.

“This is a product that has really been landfilled before,” says McNitt. “It’s coal ash, and it’ll set within 8-10 minutes. It’s all monolithic, and one continuous pour — it’s literally all one piece.”

Eco Material Technologies’ concrete product is impressively durable. A traditional cinderblock wall will crush at around 800 psi, while this material crushes at about 8,000 psi.

“It’s ten times stronger than a cinderblock wall that can withstand hurricanes,” claims McNitt. “I don’t think you’d even notice a hurricane. It’ll be really quiet inside, too — so you won’t get interrupted during your hurricane party. It’s way over-engineered, it really is.”

The second story is built using weatherproof and eco-friendly products by LP Building Solutions. Their treated, engineered wood products come with a 50 year warranty, and their radiant barrier roof decking product blocks 97% of UV rays, and keeps attic temperatures 30° cooler than traditional building materials. These materials, combined with the concrete first floor, will keep heating and cooling costs low — something the folks at HiveASMBLD refer to as “thermal mass performance.”

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This article originally appeared on CultureMap.com.