NC named best state for business in new CNBC ranking

A technician looks over chips manufactured by Cree Inc.’s Wolfspeed subsidary.

A technician looks over chips manufactured by Cree Inc.’s Wolfspeed subsidary.

Cree Inc.

North Carolina is once again the best state for business, according to a newly released ranking by CNBC.

The Tar Heel State took the first spot in the rankings in 2022, and was runner-up in 2021. In the ranking’s 16-year history, the state has rarely fallen outside of CNBC’s top 10.

The most important factor that was assessed was “workforce,” in which North Carolina was ranked in the top spot. CNBC cited “educated workers flocking” to the state and worker training programs that “are among the best in the country.” The state earned only the 12th ranking in that category in 2022.

“Companies in desperate need of skilled workers are going where the people are, and people are going to North Carolina,” CNBC Special Correspondent Scott Cohn said. “The state’s well-balanced economy is handling the growth well. Rising political tensions could create issues down the road, but for now, North Carolina seems to have the winning formula — for the second year in a row.”

Another factor that contributed to the state’s overall No. 1 ranking included “economy,” in which the state ranked third. CNBC alluded to the state’s “solid growth, stable state finances and a healthy housing market.” North Carolina also took the No. 6 ranking in both the “technology & innovation” and “access to capital” factors.

North Carolina is once again the best state for business, according to a newly released ranking by CNBC. 
North Carolina is once again the best state for business, according to a newly released ranking by CNBC.  Courtesy of VinFast

“When we invest in our people, we invest in the foundation of our success,” Gov. Roy Cooper said in a statement. “Thanks to our well-trained, dedicated and diverse workforce, North Carolina has been named the top state for business for the second year in a row and it’s important for us to invest in the education and well being of our people to continue our amazing success.”

In a live interview at the Biltmore Estate in Asheville, Cooper cited the state’s “dynamic community college system,” “best array of public and private universities in the country,” and “a Commerce Department that understands that talent is important” as reasons the workforce stands out.

“After another record-breaking year for economic development wins, I am more than proud to see the great state of North Carolina recognized as the best state in the nation for business yet again,” N.C. Commerce Secretary Machelle Baker Sanders said in a statement. “Last year’s performance includes nearly 29,000 new jobs and $19.3 billion in investments – the result of collaborative leadership and hard work. My team and I are proud to have launched the state’s ‘First In Talent’ strategic economic development plan, intentionally incorporating diversity, equity, and inclusion practices that have facilitated booming economic opportunities for all North Carolinians.”

Senate leader Phil Berger, a Rockingham County Republican, credited the legislature with maintaining North Carolina’s ranking.

“We’ve overcome partisan obstructionism, regional competition, and economic uncertainty, and have confirmed that our state’s reputation and economy are stronger than ever,” Berger said in a statement. “Republicans had a vision and plan when we won control of the General Assembly back in 2010, and improving our state’s business climate was a big part of that.”

‘Political harmony’ fading

The ranking, however, isn’t all good news for the Old North State. Its ranking in “life, health & inclusion” fell to the 34th spot, down from 28 last year. Last year, CNBC said that the state’s No. 1 ranking was due to state leaders “managing to put aside their very deep political divisions.”

Now, CNBC is warning that the “political harmony that has helped made the state so competitive is fading.” The news outlet pointed to the state’s lack of anti-discrimination protections and the recently enacted 12-week abortion ban.

“We’re seeing this culture war legislation introduced across the country,” said Cooper, a Democrat who tried to block the new abortion restrictions only to have the Republican-dominated legislature override his veto. “When people are thinking about where they want to live, those issues matter. You don’t want to limit your workforce and these companies are going to hear it from people.”

Overall, North Carolina’s No. 1 ranking is part of a larger trend of accelerated economic migration to the Southeast. The neighboring states of Virginia, Tennessee and Georgia took the next three spots in CNBC’s ranking, respectively. Earlier this month, it was revealed that for the first time, these states, along with Florida and Texas, were contributing more to the nation’s gross domestic product than the Northeast.

Thousands of people move to North Carolina every year, including more than 130,000 in the year ending July 1, 2022. In 2022, big companies announced thousands of new jobs.

CNBC’s ranking is based on a study that looks at 86 metrics across 10 categories of competitiveness to score all 50 states. Primarily, it focuses on what factors companies consider when choosing where to expand, and how states help to win business.

This story was originally published July 11, 2023, 10:54 AM.

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Jazper Lu is a politics reporting intern for The News & Observer’s state government news service, the NC Insider. He is a rising junior at Duke University, where he serves as managing editor for Duke’s independent student newspaper, The Chronicle.