Apple’s 133-acre Texas campus will host 5,000 employees when it opens in 2022. It has the capacity … [+]
Texas reclaimed the number two spot in Forbes’ Best States for Business ranking this year thanks to the best growth prospects in the country and a little help from the most valuable company in America.
Apple expanded into Texas in a big way this year, breaking ground on a $1 billion campus in Austin and committing to produce its redesigned Mac Pro there. The 244,000-square-foot Mac factory employs 500 people. Apple says its new campus could one day accommodate 15,000, which would make it the largest employer in town.
“With the construction of our new campus in Austin now underway, Apple is deepening our close bond with the city and the talented and diverse workforce that calls it home,” said CEO Tim Cook, marking the campus groundbreaking in November. Attention—and investment—from the iPhone maker supports what people across the Lone Star State have been arguing for years: Texas is a great place to grow—or start—a business.
The data tells a similar story.
Moody’s Analytics expects Texas businesses to add close one million new jobs by 2023, which would give the state the third-highest average annual job growth rate in the country. The share of Texans who started new businesses last year was the fourth highest in the country, according to Kauffman Foundation data on early-stage entrepreneurship. And only three states—California, New York and Washington—saw more venture capital dollars flow in in 2018 and 2019, according to PWC.
Yes, companies love the state’s low tax rates, low share of workers in unions (4%) and low cost of doing business (energy costs are 22% below the national average). But it’s the growth story that pushed Texas above third-ranked Utah this year. A strong outlook, however, was not enough to outpace North Carolina, which has the best business climate in the U.S. and tops our ranking for the third-year in a row.
North Carolina has also seen an influx of tech-giants. Amazon is opening $200 million distribution … [+]
Full List: The Best States For Business
Forbes has rated the business climates of the 50 states since 2006, with only North Carolina (three times), Utah (six times) and Virginia (five times)ever claiming the top spot. Texas has ranked second twice before, including on the inaugural list, and last year it took third place. The 14th version looks at 40 metrics across six main categories: business costs, regulatory environment, economic climate, growth prospects and quality of life. (Click here for a detailed methodology).
North Carolina ranks in the top third in all six categories. It gets highest marks for its regulatory environment—including a Aaa rating on its general obligation debt from Moody’s—has the fourth lowest business costs of any state and rates ninth for labor supply.
Throughout 2019 companies such as Microsoft, car sales platform Carvana and drug company Pfizer announced plans to invest in North Carolina and its highly educated workers. “Companies like Microsoft continue to expand in North Carolina because they see us as the right fit for technology success. Skilled, diverse workers and strong infrastructure mean businesses are confident that expanding in our state is a good business decision,” said Governor Roy Cooper, in a statement announcing the software giant’s plans.
Utah moved down one place to finish third. The state regularly tops this (and may other) lists, due to its youth, population growth and high rate of entrepreneurship. Job growth in the state is expected to be some of the best in the nation in the next five years.
Rounding out the top five are Virginia and Florida. Virginia ranks first for quality of life and third in both labor supply and regulatory environment. Its business costs are on the high side, but that did not stop Amazon from picking it for its second headquarters. A strong economy pushed Florida into the top level for the first time, a big comeback considering the housing crisis hit the Sunshine State especially hard.
The biggest gainers were 21st-ranked Wisconsin and 25th-ranked New Hampshire, which moved up 11 and nine spots respectively. Ohio, which peaked with a ranking of 11 in 2016, dropped nine spots this year for a rank of 29.
Alaska ranked 50th for the second year in a row. Alaska’s economy shrunk faster than any other state over the past five years (down 0.6% per year), due to the fall in energy prices. Net migration out of the state also ranks worst in the nation. Finally, Alaskas’s employment outlook is second worst in the country, according to Moody’s and labor data firm Emsi.
Full List: The Best States For Business