CNBC Changes Ranking Formula - Again.
Before we review CNBC’s Top States for Business ranking, how about some graphics?
First, where business applications occurred in 2022:
Second, which states are losing and gaining population:
Third, which states are leading and lagging in GDP growth relative to national GDP:
See the patterns?
Human and financial capital in on the move.
Onto the CNBC rankings.
In their own words: Emphasis added
Each category is weighted based on how frequently states use them as a selling point in economic development marketing materials.
That way, our study ranks the states based on the attributes they use to sell themselves.
and
We developed our criteria and metrics in consultation with a diverse array of business and policy experts, and the states. Our study is not an opinion survey.
CNBC Top States for Business ranking linked here.
In 2022, CNBC categories followed the trends in economic development marketing materials thusly:
Total of 2500 points
Workforce - 410 points possible awarded
Infrastructure - 380 points
Cost of Doing Business - 345 points
Economy - 325 points
Life, Health, Inclusion - 325 points
Technology & Innovation - 250 points
Business Friendliness - 200 points
Education - 165 points
Access to Capital - 50 points
Cost of living - 50 points
THIS YEAR, the categories were nudged a little.
Workforce - 400 (-10 from last year)
Infrastructure - 390 (+10)
Economy - 360 (+35) and previously #4.
Life, Health, and Inclusion - 350 (+25) LHI is a new category added in 2021 when it was worth 375 points. Last year it was #5 in the rankings.
Cost of Doing Business - 290 (-55 points) and dropped 2 places.
Technology & Innovation - 270 (+20)
Business Friendliness - 215 (+15)
Education - 125 (-40)
Access to Capital - 50 (no change)
Cost of Living - 50 (no change)
# of Metrics used: 2019- 60 metrics; 2020 - no ranking; 2021 - 85; 2022 - 88; 2023 - 86
CNBC goes a LONG way to calling out Texas in the culture wars with this separate article that included a fairly lengthy mention of how one family moved out of Texas to protect their transgender child.
Texas’ biggest weakness in 2023 is also its most controversial. The state finishes dead last in Life, Health & Inclusion, dropping from No. 49 last year.
Health care in the state is poor, according to the United Health Foundation, which ranks the state No. 50 for clinical care, and No. 47 for access to primary care physicians. No state has a greater percentage of residents without health insurance.
Violent crime is on the rise, jumping roughly 10% between 2018 and 2021, according to FBI statistics.
Note they use the term “residents” to make the claim of those not having health insurance. Texas population - 30,000,000 up by almost 900,000 since 2020.
The LHI ranking cost Texas significantly in the CNBC ranking.
The top 10 states in total scores and their (LHI raw score)
North Carolina - 1628 (149)
Virginia - 1527 (217)
Tennessee - 1502 (115)
Georgia - 1489 (137)
Minnesota - 1483 (269)
Texas - 1478 (53)
Washington - 1475 (242)
Florida - 1447 (129)
Utah - 1425 (138)
Michigan - 1424 (178)
Chief Executive Magazine’s rankings of the Best and Worst States for Business are: Bold are top 10 for both CNBC and Chief Executive Magazine:
Texas
Florida
Tennessee
North Carolina
Arizona
Indiana
Georgia
South Carolina
Nevada
Utah
Ohio
Virginia
Here are the most recent employment growth numbers from the Bureau of Labor Statistics:
If Texas or Florida were restaurants, this would be Yogi Berra’s quote:
Nobody goes to Texas or Florida anymore, it’s too crowded.
Reminder on previous CNBC rankings for Virginia:
2007 - 1
2008 - 2
2009 - 1
2010 - 2
2011 - 1
2012 - 3
2013 - 5 *ummm…
2014 - 8 (tie) *did you hear something?*
2015 - 12 *cue gasp*
2016 - 13 #PearlClutchDropsBourbon
2017 - 7 *whew* (Big moves up on Infrastructure and Economy)
2018 - 4 *okay*
2019 - 1
2020 - no ranking
2021 - 1
2022 - 3
2023 - 2
The CNBC ranking is good for marketing and Virginia lines up well with their metrics as long as we don’t have another sequestration, but the market moves where the market moves.
And for the last decade we’ve fallen behind in GDP growth.
Key takeaway - as we have pointed out for almost a decade now - Cost of Doing Business (#34) and Cost of Living (#25) need to be addressed.
They won’t be. Why? Too many policy leaders think that CNBC’s rankings reflect market reality.
When these graphics actually do:
The two areas in the CNBC rankings where Virginia can make up ground against North Carolina are in Workforce and Economy.
The Youngkin Administration has done great work on Workforce and that should be reflected in our marketing materials. Which is great.
Unless CNBC changes their formula - again.