How We Ranked The Best States For Business 2019 – Forbes

Getty

North Carolina leads ForbesBest States for Business list for the third year running, but Texas is giving the Tar Heels some competition.

Our 14th annual ranking is based on measures of six categories relevant to businesses: costs, labor supply, regulatory environment, current economic climate, growth prospects and quality of life. We factor in 40 metricsfrom 17 sources to determine the ranks across the six main areas. The overall scores are based on a combination of ranks in the six main categories. Below is a breakdown of each category with the best and worst performer, along with the data sources.

Read: The Best States For Business 2019: North Carolina And Texas On Top

Business costs incorporatethe Moodys AnalyticsCost of Doing Business index, which includes labor, energy and taxes. Moodys weighs labor costs the most heavily in its index. We also included a state tax index from theTax Foundation.

Labor supply measures college and high school attainment based on figures from theCensus Bureau. We also consider net migration over the past five years and the projected population growth over the next five years. Other factors include the percentage of the workforce that is represented by a union, from the Bureau of Labor Statistics, and the percentage of the population between the ages of 25 and 34.

Regulatory environment includes metrics influenced by the government. We incorporate the regulatory component of the Freedom in the 50 States report from theCato Institute. It considers the liability system, property rights, health insurance and the labor market. Other data points include Moodys bond rating on the states general obligation debt and the transportation infrastructure including air, highway and rail.

Another factor in the regulatory component is a measure of the best and worst legal climates for businesses compiled by theU.S. Chamber Institute for Legal Reform. Seventy percent of general counsels who participate in the survey say a states lawsuit environment impacts decisions such as where to locate or expand. One other factor was a measure of astates fiscal healthbased on a study from the Mercatus Center that examines short- and long-term debt and other key fiscal obligations.

Finally, we measured laws that protect people from employment discrimination based on sexual and/or gender identity, using ratings by theMovement Advancement Project.

The economic climate category gauges job, income and gross state product growth as well as average unemployment during the past five years. Other metrics include the average 2019 unemployment rate and the number of the 1,000 biggest public and private companies by revenue headquartered in the state.

Growth prospects measures job, income and gross state product growth forecasts over the next five years from Moodys Analytics. We also factor inEmsis bottom-up job forecasting approach, which complements Moodys top-down forecasts. Another metric was venture capital investments, per the PricewaterhouseCoopersMoneyTreesurvey. The final data point in the category isentrepreneurial activityas tracked by the Kauffman Foundation.

Quality of life takes into account cost of living via Emsi, school test performance via theDepartment of Educationand crime rates from theFBI. We factored in the mean temperature in the state as a proxy for the weather and the number of top-ranked four-year colleges in the state fromForbes annual college rankings. We considered the culture and recreational opportunities in the state based on an index created byBert Sperling as part of our annualBest Places for Business and Careers list. Other factors include commute times from the U.S. Census and theUnited Health Foundations Americas Health Rankings.

Full List:The Best States For Business

See the article here:

How We Ranked The Best States For Business 2019 - Forbes