Quality of Life, Innovation Drive Improved CNBC Business Climate Rank
Connecticut climbed eight places to 31st in CNBC’s 2023 America’s Top States for Business ranking, driven by the state’s quality of life, technology and innovation, and education metrics.
CNBC released its latest annual business climate study July 11, ranking Connecticut in the top 20 for four of the 10 weighted categories used to measure a state’s economic competitiveness.
The life, health, and inclusion category drew Connecticut’s highest score, with the influential study ranking the state’s quality of life 10th, up seven places from last year.
The state’s technology and innovation score, which measures areas such as patents issued and research grants, improved 12 places to 13th.
Connecticut’s education system—a state’s “main source of talent and an engine of innovation”—also ranked 13th, down five spots from last year.
The study scored Connecticut’s business friendliness 16th—down five spots from 2022.
CBIA president and CEO Chris DiPentima said it was “heartening to see Connecticut’s improved ranking, despite the lower workforce and education scores—two traditional areas of strength.”
The state’s workforce rank—which measures skills and productivity and the concentration of STEM workers—dropped seven spots to 21st this year.
DiPentima said Connecticut currently has 94,000 unfilled jobs and its workforce ranking shows the state must address slow population growth and increase the labor force participation rate for women and other underrepresented groups.
“The state, in collaboration with the private sector, has made great progress with workforce training programs,” he said.
“What’s missing are the workers to fill our job openings, and that demands a real emphasis on issues like housing, affordability, and childcare.”
CNBC ranked Connecticut’s cost of living 34th, a jump of nine places over last year.
“That’s still too high and remains a barrier to growth, but at least we’re moving in the right direction on affordability,” DiPentima said.
Business Cost Burden
The state’s access to capital score fell one spot to 27th, while infrastructure improved six spots to 33rd.
CNBC again ranked Connecticut’s economy and its cost of doing business in the bottom 10 of all states this year.
The economy score improved five spots to 42nd, based on Connecticut’s 2022 GDP growth of 2.4%, 17th best in the country.
Connecticut’s cost of doing business—a perennial threat to economic growth—ranked 43rd, reflecting the state’s tax burden and high labor, energy, and regulatory compliance costs.
“Unfortunately, the legislature has failed for a number of years to address business tax relief, particularly for small businesses, despite the state’s robust fiscal health,” DiPentima said.
“If policymakers are not making business tax relief a priority, then, we’ve got serious concerns.
“This baffles me—why wouldn’t it be a priority, especially after we’ve made significant progress on reducing the cost of living in Connecticut through housing measures and personal income tax relief?
“If you’re not making it more affordable to do business here, then businesses cannot make the investments that we need in the form of wage increases, additional training or hiring, expanding their roots here, and that’s what drives the economy.”
New England Region
Massachusetts ranked the highest of the New England states in this year’s CNBC study, climbing nine spots to 15th overall.
The Bay State ranked first for technology and innovation, third for both education and access to capital, eighth for life, health, and inclusion, 13th for workforce, and 19th for business friendliness.
Vermont improved two spots from last year to 29th, ranked first for life, health, and inclusion, 10th for education, and 16th for business friendliness.
CNBC ranked Maine’s business climate 39th—up from 43rd last year—scoring the state second for life, health, and inclusion and 19th for education.
New Hampshire slipped five places to 40th, ranked fourth for business friendliness, eighth for education, and 15th for life, health, and inclusion.
Rhode Island’s business climate was unchanged at 45th, ranked 12th for life, health, and inclusion, 19th for workforce, and in the bottom 10 states for infrastructure, economy, cost of doing business, and education.
Top, Bottom States
CNBC ranked North Carolina’s business climate best in the country for the second consecutive year, “despite growing political divisions that threaten its rankings in education and quality of life.”
“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 study noted.
Virginia’s business climate improved from third to second, with Tennessee (2022: sixth), Georgia (2022: 10th), and Minnesota (2022: ninth) filling out the top five states.
New Jersey improved the most of any state, climbing 23 spots to 19th based on a big jump in the economy category (50th to 19th) and top 10 scores for life, health, and inclusion (third) and education (fourth).
Arizona jumped 20 spots to 14th, New York improved 16 places to 20th, and Delaware was up 10 spots to 18th.
Massachusetts, South Carolina (27th), Nevada (30th), and Connecticut all improved nine places.
Alaska’s business climate fell one spot to 50th overall this year, followed by Louisiana (2022: 44th), Mississippi (2022: 50th); Hawaii (2022: 46th), and West Virginia (2022: 44th).
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