If you’re thinking of starting a new business, you might be mulling where to locate it.
This could help. Harrington Group International, a business software company based in Orlando, Florida, has published a survey ranking states (and Washington, D.C.) according to where it’s best to operate a business.
Harrington used nine metrics that fell into three categories: workforce and consumer habits; business culture; and financial climate.
The metrics include:
· Workforce and consumer habits: job growth, educated worker mobility, and consumer spending.
· Business culture: business growth rate, start-up survival rate, and business self-assessment.
· Financial climate: state credit rating, income tax burden, state GDP growth.
The top 10 states are
1. Florida
2. Texas
3. Tennessee
4. South Dakota
5. Idaho
6. Montana
7. South Carolina
8. North Carolina
9. Nevada
10. Oregon.
Florida ranked No. 1 for workforce and consumer habits, No. 2 for financial climate, but only No. 28 for business culture. Texas ranked No. 1 for financial climate, No. 2 for workforce and consumer habits, but only No. 38 for business culture. It’s not clear what would be weak about the business culture in Florida and Texas.
In any case, in 2021, nearly 134,000 people with at least some college education moved to Florida, the report said. Consumer spending and job growth rates there have risen over the past year by 15.6% and 4.9%, respectively.
Also, Florida has a triple-A credit rating from S&P, and just 6.9% of state tax revenue came from corporate income taxes last year.
Looking at Texas, it has no personal or corporate income tax, the report noted. While U.S. GDP dipped 0.6% annualized in the second quarter, Texas GDP rose 1.8%, and its payrolls grew 5.7% during the year ended in August..
The bottom 10 are
42. Louisiana
43. Missouri
44. California
45. New Hampshire
46. Hawaii
47. Washington, D.C.
48. Kansas
49. New York
50. Illinois
51. Connecticut.
Washington ranked No. 44 for business culture, No. 43 for workforce and consumer habits, and No. 29 for financial climate.
In Connecticut, annualized GDP fell by 4.7% in the second quarter, and 58.3% of state tax revenue comes from personal and corporate income, the report said.
When it comes to Illinois, S&P gave it a triple-B-plus credit rating, the worst score among states and close to the lowest investment-grade rating (triple-B-minus).
While New York has strong job growth of 4.7%, educated workers are fleeing the state. More than 162,000 left in 2021. And consumer spending growth was slower than the national average, the report said.
Kansas’ GDP fell this year, and fewer businesses are opening in Washington, D.C., while startups are unlikely to survive in either place.
Looking at the numbers overall, “most states have at least something to recommend them to business owners,” the report said.
“Twenty-eight states had more educated workers moving in than leaving, and 15 earned S&P’s triple-A credit rating, its highest designation.
