Business Climate, Costs Impact CNBC ‘Top States’ Ranking
Connecticut dropped one place to 32nd in the 2024 edition of CNBC’s influential America’s Top States for Business rankings.
The cable network released its latest annual economic competitiveness study July 11, ranking Connecticut in the top 20 for three of 10 weighted categories.
Connecticut’s top 10 rankings for education and quality of life were offset by concerning declines in business friendliness and technology and innovation.
The state’s education system—”a key consideration for companies and families deciding where to put down roots”—ranked fourth, up from 13th last year.
Quality of life was ninth, following a 10th place rank in 2023, while the workforce category fell one spot to 20th.
Business Friendliness
However, CNBC dropped the state’s business friendliness ranking—an assessment of the regulatory climate and “overall bureaucracy”—from 16th to 39th.
Technology and innovation, a traditional strength, also saw a significant decline, falling 12 places to 25th overall.
Access to capital rose five spots to 22nd and infrastructure—this year’s top weighted category—improved to 29th from 33rd.
CNBC ranked the state’s cost of living at 34th, while Connecticut remains the eighth costliest state in the country to run a business.
A perennial threat to economic growth, Connecticut’s business costs are driven by the state’s tax burden and high labor, energy, and regulatory compliance costs.
Connecticut’s economy ranking improved from 42nd to 39th, driven in part by last year’s 2.1% GDP growth, the best performance in the New England region and 31st among all states.
Policy Consequences
CBIA president and CEO Chris DiPentima said the significant decline in Connecticut’s business friendliness ranking reflected “a series of recent policy decisions imposing or expanding costly workplace mandates.”
“And the legislature’s inaction—for a second consecutive year—on a transformative, bipartisan bill giving hundreds of thousands of small business employees access to quality, affordable healthcare doesn’t help,” he said.
“We can—and must—do more to lower the state’s high cost of living and make it much easier and less costly to start and run a business here.”
CBIA’s Chris DiPentima
“The last two legislative sessions missed real opportunities to pass policies that would help continue to accelerate economic growth, focusing instead on past detrimental policy habits.”
DiPentima noted that the CBIA Foundation, created to address the state’s economic challenges, will release a long-term economic action plan in September featuring solutions for tackling Connecticut’s shortcomings.
“While it’s heartening to see top 10 rankings for education and quality of life, we can—and must—do more to lower the state’s high cost of living and make it much easier and less costly to start and run a business here,” he said.
New England Region
Connecticut was the highest ranked of the New England states in the latest CNBC study.
Vermont dropped eight spots from last year to 37th, ranked first again for quality of life but posting steep declines in business friendliness and education.
Massachusetts posted one of the largest declines, dropping from 15th to 38th amid steep falls in its workforce, business friendliness, economy, and infrastructure rankings.
Massachusetts posted one of the largest declines, dropping from 15th to 38th in 2024.
New Hampshire dropped one spot to 41st, with top 10 performances in quality of life, business friendliness, and education offset by poor infrastructure and economy rankings.
Maine fell from 39th to 42nd, with its second place ranking for quality of life offset by bottom 10 scores for infrastructure, workforce, and economy and a major decline in business friendliness.
CNBC ranked Rhode Island’s business climate 44th—up from 45th last year—scoring the state in the bottom 10 for the cost of doing business, business friendliness, education, economy, and cost of living.
Top, Bottom States
Virginia was ranked the best state for business in this year’s study, moving up from second in 2023 based on top 10 scores for education, infrastructure, business friendliness, access to capital, and workforce.
CNBC noted “the nation’s best education system and policies that give companies room—both literally and figuratively—to grow,” with Virginia ranked in the top half or better in each of the 10 competitiveness categories.
“Virginia works really hard to listen to companies,” the Virginia Economic Development Partnership’s Michael Dreiling told CNBC.
North Carolina was ranked second, following first place finishes in 2022 and 2023, with Texas (2023: sixth), Georgia (2023: fourth), and Florida (2023: eighth) filling out the top five states.
Alabama improved the most of any state, climbing 22 spots to 20th based on surging performances in the workforce, infrastructure, education, cost of doing business, and business friendliness categories.
Hawaii’s competitiveness ranking fell four spots to 50th overall in 2024, followed by Mississippi (2023: 48th), Alaska (2023: 50th); Louisiana (2023: 49th), and Montana (2023: 35th).
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CBIA IS FIGHTING TO MAKE CONNECTICUT A TOP STATE FOR BUSINESS, JOBS, AND ECONOMIC GROWTH. A BETTER BUSINESS CLIMATE MEANS A BRIGHTER FUTURE FOR EVERYONE.