North Carolina is Top State for Business, led by workforce, economy
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At a time when companies are clamoring for workers while trying to navigate a treacherous economy, no state is meeting their needs more effectively than North Carolina. The Tar Heel State is America's Top State for Business in CNBC's annual competitiveness study. It is the second consecutive year at the top for North Carolina — a rare feat in the CNBC study, which launched in 2007. Business and the economy in the state have been on a tear since the pandemic, and the state has scarcely looked back. In 2023 alone, the state has amassed a trophy case full of economic development wins, ranging from a $130 million investment by Bosch to expand its power tool manufacturing facility in Lincolnton, to a $458 million biomanufacturing facility to be built in Greensboro by cellular therapeutics company ProKidney, and even a $58 million turkey production facility in Goldsboro by poultry breeder Select Genetics. The projects come on top of major wins last year, including Vietnamese electric vehicle manufacturer VinFast announcing it will build its first North American plant in the state, and Durham-based semiconductor materials manufacturer Wolfspeed expanding its operations there.
North Carolina Gov. Roy Cooper walks to the podium to address the crowd during President Joe Biden's visit to Wolfspeed, a semiconductor manufacturer, in Durham, North Carolina, March 28, 2023. Melissa Sue Gerrits | Getty Images News | Getty Images
Last month, Apple filed applications to begin work on its $1 billion facility in the famed Research Triangle Park announced in 2021, with 700,000 square feet of office space in its initial phase. It is Apple's first hub on the East Coast. A common thread through all the projects is people. "Our talented, educated workers are the foundation of our economic success," said Gov. Roy Cooper, a Democrat, in his state of the state address in March. The numbers bear that out. North Carolina ranks first in the all-important Workforce category of CNBC's study. In particular, the state is a leader in attracting and retaining talent across a range of industries, said Josh Wright, an executive vice president with labor market analytics firm Lightcast, which provided some of the data for the CNBC study.
"Charlotte is seeing a lot of growth in the financial sector," he said. "But it's not just a one-trick pony. You've got the Raleigh-Durham area. You've got massive, major, internationally well-known universities driving growth." The state is also a leader in career education. "You have one of the most competitive community college systems in America as well in North Carolina, that is attuned to the needs of their industry," Wright said. In addition, more than 89% of participants in state worker training programs were employed within six months, according to U.S. Labor Department data. That is the third-best record in the country, after Alaska and Massachusetts. Strong workers fuel GDP, solid state finances North Carolina's strong workforce helped feed its performance in other categories. The state finishes No. 3 in Economy. Its $560 billion gross domestic product grew by a healthy 3.2% last year, though growth has leveled off at the beginning of 2023, according to the Commerce Department. State finances are solid; its debt rating is top-notch, according to Moody's. And North Carolina's housing market appears to be handling the influx of new residents with minimal stress. Home prices surged by more than 13% last year, according to the Federal Housing Financing Agency, putting a dent in affordability. But home builders are picking up the slack, with housing starts among the highest in the nation, according to the Census Bureau. However, an uptick in foreclosures, according to figures from ATTOM Data Solutions, bears watching. North Carolina also finishes strong in Technology & Innovation and Access to Capital, both at No. 6. Political tensions pressure education, quality of life The state had a strong showing in education, at No. 7, but in May, Cooper declared a state of emergency in the state's public education system. It is a sign that the political detente that has helped the state achieve its business success may have come to an end. "It's clear that the Republican legislature is aiming to choke the life out of public education," Cooper said on May 24. "I'm declaring this a state of emergency because you need to know what's happening." The declaration, which has no legal effect, came after Republicans introduced a plan to expand vouchers and charter schools, which the governor said will divert critical funding from public education. A key sponsor of the legislation is state Rep. Tricia Cotham, who switched from Democrat to Republican in April, giving the GOP a supermajority in the General Assembly. "We have to evolve, and I believe that the state is changing," Cotham said in unveiling the school choice legislation. "One size fits all in education is wrong for children." Already, the newly empowered legislature has passed a 12-week abortion ban over the governor's veto. The law took effect on July 1. Because this year's CNBC rankings consider reproductive rights as a metric in Life, Health & Inclusion, the ban hurts the state's already poor ranking in the category. It finishes No. 38 in the category, down from No. 28 in 2022.
Abortion rights demonstrators gather to protest in Raleigh, North Carolina, after the Supreme Court's decision in the Dobbs v. Jackson Women's Health case, June 24, 2022. Anadolu Agency | Anadolu Agency | Getty Images
In addition to the abortion ban, North Carolina is one of just five states in which statewide protections against discrimination apply only to people with disabilities, according to the National Conference of State Legislatures. Violent crime is also on the rise, according to FBI statistics. And the state ranks poorly for health care, with low public health funding and a high number of people without health insurance, according to the United Health Foundation. Scoring all 50 states The CNBC study measures all 50 states across 10 categories of competitiveness, for a total of 2,500 possible points. North Carolina scores 1,628 points to capture this year's crown. Our methodology assigns a weight to each category based on how frequently states cite it as a selling point. The idea is to measure the states based on the criteria they use to pitch themselves to business. Here are this year's categories and point totals: Workforce: 400 points (16%)
Infrastructure: 390 points (15.6%)
Economy: 360 points (14.4%)
Life, Health & Inclusion: 350 points (14%)
Cost of Doing Business: 290 points (11.6%)
Technology & Innovation: 270 points (10.8%)
Business Friendliness: 215 points (8.6%)
Education: 125 points (5%)
Access to Capital: 50 points (2%)
Cost of Living: 50 points (2%) The contenders
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Source: CNBC
