High Costs, Economy Sink State’s Business Climate Ranking
Connecticut fell 15 places to 39th in CNBC’s 2022 America’s Top States for Business ranking, weighed down by high costs and an economy struggling to recover from the pandemic.
CNBC released it latest annual business climate study July 13, ranking Connecticut in the top 20 for four of the 10 weighted categories used to measure a state’s economic competitiveness.
Education drew the state’s highest score, with the influential study ranking Connecticut’s K-12 and higher education systems eighth among all states.
The study scored Connecticut’s business friendliness 11th—down three spots from last year. That category emphasized the way states responded to the pandemic.
Connecticut ranked 14th for workforce (up one spot from last year), which measures skills and productivity, the concentration of STEM workers, and availability of training programs.
“With employers desperately seeking workers to fill more than 11 million job openings nationwide, it should come as little surprise that workforce carries the most weight in this year’s rankings,” the cable network explained.
The state rose seven spots to 17th in the life, health, and inclusion category, which reflects livability factors like per capita crime rates and environmental quality, the inclusiveness of state laws, and healthcare quality and outcomes.
CNBC dropped Connecticut’s technology and innovation rank 17 spots to 25th with the state’s access to capital score falling eight places to 26th.
Infrastructure reflected Connecticut’s largest biggest decline, falling 21 spots to 39th, impacting the state’s overall rank as that category was weighted second based on “the massive effort to rebuild the domestic supply chain.”
CNBC ranked Connecticut’s cost of living eighth highest in the country and its cost of doing business sixth highest, with both scores unchanged from last year.
“Worries about inflation” led CNBC to weight the cost of doing business category third highest, further impacting the state’s overall business climate rank.
Connecticut’s economy ranked 47th in this year’s study, a steep drop from 32nd, and a reflection of the state’s slow post-pandemic GDP growth and jobs recovery and the pace of personal income growth.
CBIA president and CEO Chris DiPentima said the state’s fall in CNBC’s business climate rankings must “drive greater awareness about what we need to do to unlock Connecticut’s tremendous economic potential.”
“The structural issues like affordability and high taxes that dogged Connecticut’s recovery from the last recession clearly threaten our recovery from the pandemic,” he said.
“Soaring inflation, supply chain disruptions, and the worker shortage—which is having a much bigger impact in Connecticut than other states—are compounding those issues.
“Solving the labor shortage crisis and attracting and retaining more companies will only happen when we comprehensively address the state’s high cost of living and its high cost of doing business.
“These are significant challenges, but they’re not insurmountable—we need greater focus from policymakers and broader collaboration among the public and private sectors to develop long-term, sustainable solutions.”
New England States
Massachusetts scored highest of the New England states in this year’s study, ranked first for education, sixth for access to capital, 10th for technology and innovation, and 13th in the life, health, and inclusion category.
Vermont jumped 11 spots to 31st, ranked first for life, health, and inclusion, eighth for education, and 14th for business friendliness.
New Hampshire rose two places to 35th overall, with top 20 rankings for education (sixth), business friendliness (eighth), and life, health, and inclusion (15th).
CNBC ranked Maine 43rd, up five spots from last year, with top 20 category scores for life, health, and inclusion (second) and business friendliness (19th).
Rhode Island improved one place to 45th, with a 16th place for life, health, and inclusion the state’s lone top 20 score.
Top, Bottom States
North Carolina unseated Virginia to take top place this year, ranked among the top 20 states for economy (first), access to capital (second), technology and innovation (fifth), workforce (12th), education (14th), and infrastructure (17th).
CNBC’s 2022 top five states for business:
1. North Carolina (2021: 2nd)
2. Washington (9th)
3. Virginia (1st)
4. Colorado (8th)
5. Texas (4th)
And the bottom five:
46. Hawaii (49th)
47. New Mexico (38th)
48. Louisiana (44th)
49. Alaska (50th)
50. Mississippi (45th)
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