Texas Dethroned: State Loses Top Business Ranking for 2023

Texas Falls in CNBC's America's Top States for Business Rankings

Texas, a Historic Top Performer

Texas has consistently ranked among the top states in CNBC's America's Top States for Business study throughout the years, including multiple first-place finishes. However, in 2023, Texas fell out of the top five for the first time since the study's inception in 2007. Despite finishing in sixth place, just behind Minnesota, this decline reflects the challenges faced by state economies across the country.

With its status as the second-largest state economy after California, Texas has maintained its competitiveness. It continues to have the second-best Economy ranking and has experienced significant job growth. In fact, Texas had the highest year-over-year job growth rate, outpacing other states.

Texas's Strengths and Challenges

Texas excels in various categories that contribute to its overall competitiveness. It ties for first place in Access to Capital, providing ample financing opportunities for small businesses. The state also ranks second in the Workforce category, attracting educated workers from across the country.

However, Texas faces significant challenges in areas such as Infrastructure, Education, and Cost of Living. The power outages experienced in 2021 exposed weaknesses in the state's power grid, impacting advanced manufacturing companies seeking reliable power sources. Additionally, the state's water utilities require extensive repairs, and Texas ranks low in terms of infrastructure sustainability.

Furthermore, Texas has dropped in the Education category, with per-pupil spending and K-12 test scores lagging behind other states. Despite its reputation for being a low-cost state, Texas has seen an increase in housing costs, affecting its rankings in the Cost of Doing Business and Cost of Living categories.

Quality of Life Concerns

One area where Texas has experienced a significant decline is in the Life, Health & Inclusion category. The state finished last in this category, reflecting poor healthcare rankings and an increase in violent crime. Texas also faces scrutiny for its policies regarding LGBTQ+ rights, and some residents have chosen to leave the state as a result.

While opinions on the controversies surrounding Texas may vary, some residents, like Quintin and Shavonne Bonner, believe that the media often exaggerates these issues. The Bonners, who recently moved to Fort Worth, feel that Texas is welcoming to everyone and that individuals have the power to bring about change through their beliefs and lifestyle.

On the other hand, residents like Camille Rey and her family decided to leave Texas due to concerns about LGBTQ+ rights and laws. They have found happiness in Maryland, but their new location comes with its own challenges, including higher mortgage payments and affordability issues.

Conclusion

While Texas may have fallen out of the top five in CNBC's America's Top States for Business rankings, the state still possesses many competitive advantages. However, it also faces critical challenges in infrastructure, education, cost of living, and quality of life. As each state grapples with its unique issues, Texas must address its weaknesses to maintain its position as a powerhouse in the business world while creating an inclusive and sustainable environment for all residents.

Conclusion: The Impact of Texas's Ranking Drop on New Businesses

A Warning for New Businesses

Texas's decline in CNBC's America's Top States for Business rankings serves as a warning for new businesses considering the state as a potential location. While Texas has historically been a top performer, its recent fall out of the top five suggests challenges that may have implications for new businesses in the region.

Assessing Potential Challenges

The ranking analysis highlights critical areas where Texas faces challenges, including infrastructure, education, cost of living, and quality of life. New businesses should carefully evaluate how these factors may impact their operations and ability to attract talent. Infrastructure weaknesses, such as power outages and water utility repairs, could pose risks to reliable operations. In terms of education, businesses may need to invest more in training and development programs to ensure a skilled workforce. Higher housing costs and quality of life concerns may also impact recruitment and retention efforts.

Opportunities for Improvement

While the ranking drop raises concerns, it also presents an opportunity for the state to address its weaknesses and create a more favorable environment for new businesses. Investing in infrastructure upgrades, enhancing educational systems, and focusing on inclusivity and quality of life improvements could help regain competitiveness and attract new businesses. In conclusion, Texas's ranking decline should serve as a wake-up call for new businesses considering the state. While Texas still possesses competitive advantages, it is crucial to thoroughly assess the challenges outlined in the rankings and determine how they may impact business operations and future growth. By addressing these issues head-on, Texas can position itself as a more attractive destination for new businesses in the future. Article First Published at: https://www.cnbc.com/2023/07/11/in-a-first-texas-is-no-longer-a-top-state-for-business.html