Best and Worst States for Business in 2012

We are indebted to the folks at Chief Executive magazine for the following information.

In the magazine’s eighth annual survey of CEO opinion of best and worst States in which to do business, Texas easily clinched the No. 1 rank, for the eighth successive time. California earns the dubious honor of being ranked dead last, also for the eighth consecutive year.

This year, 650 business leaders responded to the annual survey. CEOs were asked to grade states in which they do business among a variety of areas, including tax and regulation, quality of workforce and living environment. The Lone Star State was given high marks foremost for its business-friendly tax and regulatory environment. But its workforce quality, second only to Utah’s, is also highly regarded.

Florida moved up from number three last year to number two. It is perhaps no coincidence that Texas and Florida have the highest net migration of people to their states from 2001 to 2009. By contrast, New York and California lost over 1.6 million and 1.5 million in net migration out of the states, respectively, over the same period.

North Carolina, Tennessee, Indiana, Virginia, South Carolina, Georgia and Utah held their positions in the top 10, with Indiana moving up a notch to fifth.

It may be no accident that most of the states in the top 20 are also right-to-work states, as labor force flexibility is highly sought after when a business seeks a location. Several economists, most notably Ohio State’s Richard Vedder and Harvard’s Robert Barro, have found that the economies in R-to-W areas grow faster than other states, have higher employment and attract more inward migration.

Although often eclipsed by Texas, its next door neighbor, Louisiana, is the Cinderella of business improvement. In 2006, it ranked 47th—where Massachusetts is today. And Katrina didn’t help matters. But since then it has climbed steadily up the ranks so that it is now 13th—up from 27th last year—the biggest leap in a single year of any state. “In Louisiana there is an active government push to reduce taxes and regulation and to encourage new industry to relocate to the state,” commented one chairman. “This was valuable for one of our companies, which decided to make the state our headquarters.” Other chiefs point to the big strides the state has made in workforce training and economic incentives. Its economic development office is also aggressive in luring disaffected businesses from the Northeast and California.

California’s enduring place of perpetual decline continues in this year’s ranking. Once the most attractive business environment, the Golden State appears to slip deeper into the ninth circle of business hell. The economy, which used to outperform the rest of the country, now substantially underperforms. And its status as the most ruinously contentious place to operate remains undisturbed in eight years. Its unemployment rate, at 10.9 percent, is higher than every other state except Nevada and Rhode Island. With 12 percent of America’s population, California has one-third of the nation’s welfare recipients.

Following is the complete list from ChiefExecutive.net.  You can click on each state for details.

What do you think?  Do you agree with this list?

2012 RANK STATE 2011 RANK 1-YEAR CHANGE
1 Texas 1 0
2 Florida 3 1
3 North Carolina 2 -1
4 Tennessee 4 0
5 Indiana 6 1
6 Virginia 7 1
7 South Carolina 8 1
8 Georgia 5 -3
9 Utah 9 0
10 Arizona 13 3
11 Colorado 12 1
12 Nevada 10 -2
13 Louisiana 27 14
14 Delaware 16 2
15 North Dakota 21 6
16 Wyoming 14 -2
17 Oklahoma 11 -6
18 Idaho 19 1
19 South Dakota 15 -4
20 Wisconsin 24 4
21 Alabama 26 5
22 Iowa 22 0
23 Kansas 25 2
24 Missouri 23 -1
25 Kentucky 17 -8
26 New Hampshire 18 -8
27 Nebraska 20 -7
28 Montana 28 0
29 Arkansas 30 1
30 Mississippi 38 8
31 Alaska 31 0
32 Maine 36 4
33 New Mexico 32 -1
34 West Virginia 42 8
35 Ohio 41 6
36 Minnesota 29 -7
37 Washington 34 -3
38 Vermont 40 2
39 Rhode Island 35 -4
40 Maryland 37 -3
41 Hawaii 43 2
42 Oregon 33 -9
43 Pennsylvania 39 -4
44 Connecticut 44 0
45 New Jersey 47 2
46 Michigan 46 0
47 Massachusetts 45 -2
48 Illinois 48 0
49 New York 49 0
50 California 50 0

About William Bruce

President, American Business Brokers Association / Business Broker and Accredited Business Intermediary assisting business buyers and sellers with the transfer of ownership since 1986 / Author: How to Buy a Business.
This entry was posted in Gulf Coast Regional & National Economy and tagged , , , , , . Bookmark the permalink.

4 Responses to Best and Worst States for Business in 2012

  1. Eight years running for Texas is pretty impressive.

  2. As is California’s continued decimation. Everyone points to Europe as where the U.S. is heading . . . California is already there!!! The once great state, and world-class educational system, destroyed by liberal progressive-ism in just one generation. And one of the driving forces behind the growth of Texas and other business friendly states.

  3. Pingback: Alabama Cities Ranked by Strength of Local Economies: Two in Top 10% Nationally | William Bruce on Business: A Discussion

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