News Summary
Texas has been named the third best state for doing business, according to Area Development’s latest survey. This shift from its historical top ranking reflects changes in the economic landscape, impacted by high inflation and tariff uncertainties. While Texas excels in areas like corporate tax structure and energy availability, it faces challenges in business incentive programs and permitting processes. The report emphasizes the importance of effective execution and resource alignment for states to attract business investments.
Texas has been ranked as the third best state for doing business, according to Area Development’s annual survey. This designation comes behind Georgia and South Carolina, marking a notable change in Texas’s longstanding status as a top contender for economic attractiveness.
The updated assessment reveals a shift in the economic landscape influenced by factors, including high inflation and tariff uncertainty, which have affected rankings across various states. Previously, Texas consistently held the top position for decades; however, its performance in this latest survey indicates that states can no longer solely depend on offering low taxes or generous incentives. Instead, effective execution and the alignment of available resources are now essential to achieve a high-ranking status.
This year’s survey saw a number of category updates, particularly highlighting energy infrastructure with new classifications, such as “Energy Availability” and “Energy Cost”. In addition to energy factors, the report emphasized the increased significance of water access, speed of permitting, and site readiness as critical elements influencing capital investment decisions.
Key Rankings for Texas
Texas achieved impressive rankings across multiple categories, securing:
- 1st for availability of sites, corporate tax structure, and energy availability
- 2nd for access to qualified labor, logistics and infrastructure, and overall cost of doing business
- 3rd for affordable energy cost
- 4th for favorable regulatory framework
- 5th for permitting speed and process
- 8th for workforce training programs
Despite these strengths, Texas did not feature in the top ten for several categories, like business incentive programs, climate risk and resilience, and cooperation between local and state governments. These omissions highlight areas where Texas could improve its competitiveness.
Challenges and Economic Landscape
The report pointed out that permitting remains a significant challenge, with many states exploring ways to enhance their processes. Labor availability is now evaluated in context with demographic trends and automation, along with closeness to training centers, with companies being particularly interested in skilled labor tailored for emerging sectors, amidst a domestic manufacturing production surge.
Many states are proactively offering customized workforce solutions, forging collaborations with businesses to develop tailored curricula aimed at equipping the workforce with necessary skills. Furthermore, companies relocating are prioritizing the reliability of policy frameworks, consistent tax and labor regulations, and dependable energy policies over short-term financial incentives.
According to the survey, the states that excel today are those providing development-ready sites along with transparent permitting pathways, keeping in sync with private-sector timelines. This approach enhances the competitiveness of these regions in attracting new business investments.
Regional Competitors
The survey illustrates that southeastern states dominate the top rankings, with Texas, Georgia, and South Carolina leading the charge. North Carolina performed notably as well, occupying the fourth spot in the rankings. Other states that made it into the top twenty included:
- Tennessee
- Virginia
- Alabama
- Louisiana
- Ohio (5th)
- Michigan (10th)
- Mississippi
- Indiana
- Arizona
- Illinois
- Oklahoma
- Kentucky
- Florida
- Arkansas
- Wisconsin
- Pennsylvania
This survey reveals a changing dynamic in the U.S. economic development landscape, highlighting the importance of adaptation and resource alignment in maintaining competitive advantage.
Deeper Dive: News & Info About This Topic
- The Center Square: Texas Ranks Third Best State for Business
- Statesman: Texas Ranked Best State for Business
- Chron: Texas Business Friendliness Ranking
- CultureMap: Rice University Ranking
- InnovationMap: Best Cities to Start a Business
- Wikipedia: Texas
- Google Search: Texas Business News
- Google Scholar: Texas Business Rankings
- Encyclopedia Britannica: Texas
- Google News: Texas Economy
Author: STAFF HERE GREENVILLE
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