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 ranked among world's top cities of the future for global business ›
- These are the best small cities in Texas to start a business ›
- Texas ranks among best states to start a business ›
- Texas continues its reign as the top state for business ›
- Texas ranks No. 2 best state to start a business in new report ›