Utah has fallen to second place in the nation as the best state in which to do business. Forbes magazine has rated the business climates of the 50 states annually since 2006, and Utah has finished on top half of the previous years. But the past two years, North Carolina took over the top spot in Forbes’ “Best States for Business” ranking.
North Carolina’s labor, energy and tax costs are all well below the national average and rank as the second-lowest in the U.S. overall, per Moody’s Analytics, helping the state grab the top spot. Its 3 percent corporate tax rate is the lowest in the country.
Forbes cited Utah’s tech prowess as a major factor in the second-place finish. It highlighted German tech giant SAP’s announced plan to purchase Provo-based cloud unicorn Qualtrics as an indication of the strength of the state’s startup and tech community, Silicon Slopes. Utah claims energy costs 15 percent below the national average. The state’s employment growth is tops in the nation over the past five years and research firm Emsi forecasts annual job gains of 2.2 percent through 2022, also the highest for any state.
Utah’s ranking was the result of high finishes in three of the ranking categories. The state was second in labor supply, fourth in regulatory environment and fifth in growth prospects. It was hurt by its ranking in quality of life (17th) and business costs (22nd).
Only Utah (six times), North Carolina (twice) and Virginia (five times) have finished in the top sport in the Forbes ranking. The annual study looks at 41 metrics across six main categories: business costs, regulatory environment, economic climate, growth prospects and quality of life.
Texas ranks third overall but scores the highest in the growth prospects category. Rounding out the top five are Virginia and Nebraska. Alaska replaces West Virginia in the basement due to the fall in energy prices.