July 16, 2025

Texas Secures Second Place in CNBC Business Rankings

News Summary

Texas has been ranked second in CNBC’s annual list of the best states to do business, following North Carolina. The state excelled in workforce development, job growth, and a favorable business climate, despite challenges in the quality of life category. With a booming economy and no corporate or personal income tax, Texas continues to attract businesses and investment, particularly in technology. However, it faces fierce competition to improve its quality of life offerings to remain a top choice for companies.

Texas has been ranked the second-best state to do business in for 2025, according to CNBC’s newly released annual rankings. The survey assesses how well states promote and deliver on economic development priorities, with Texas maintaining a strong position in the competitive business landscape.

This year’s rankings are particularly notable as they included assessments across 135 distinct metrics, categorized into 10 groups, contributing to a total of 2,500 points for each state evaluated. Despite ranking second overall, Texas boasts the second-largest state economy in the United States, following California.

Among significant findings, Texas achieved the top rank in the workforce category, highlighting the strength and quality of its labor force. Additionally, the state ranked second in both the economy and technology and innovation categories, showcasing its diverse economic base and innovative enterprise environment. CNBC analysts remarked that Texas’ robust performance indicates resilience even amid potential economic downturns.

However, while Texas shows strength in various economic factors, it did encounter challenges regarding quality of life, where it ranked near the bottom of that category. This assessment encompasses critical elements such as health care, inclusiveness, and environmental considerations that affect residents. Specifically, Texas scored poorly due to factors like high uninsured rates and moderate crime levels.

The overall business climate in Texas remains a significant advantage for attracting investment, particularly in the technology sector and labor pool. The state’s favorable business environment is characterized by the absence of a corporate income tax and personal income tax, enhancing its appeal to businesses seeking to establish or expand operations. Texas has attracted substantial investments due to its economic incentives and favorable conditions.

Significantly, Texas continues to experience robust job growth, with an annual addition of over 60,000 jobs reported within its workforce. The state’s tort system remains favorable, and substantial incentive programs are in place to entice new businesses. Despite achieving these milestones, Texas’ unemployment rate stands at 4.1%, slightly above the U.S. average of 4%.

In contrast, North Carolina emerged as the top state for business, surpassing Texas, marking a notable shift in the rankings. North Carolina’s ascent over the years emphasizes the importance of economic diversification, workforce development, and infrastructure resilience. The state has consistently ranked first three times out of the last four years, indicating a trend towards prioritizing sustainability and comprehensive economic strategies over traditional cost-driven models.

Moreover, Texas faced challenges related to its quality-of-life rankings, specifically in terms of infrastructure quality. The state’s poor position in these metrics, where it ranked 49th, has greatly impacted its overall standing. As it competes with states like North Carolina, these challenges prompt discussions on regional economic strategies and sustainability efforts. This regional competition highlights shifting corporate priorities that increasingly value sustainable ecosystems alongside traditional operational expenses.

Key contributors to Texas’ attractiveness for businesses include its connectivity to global markets. Infrastructure factors such as DFW Airport and deep-water ports in Houston play vital roles in maintaining the state’s competitive edge in attracting investment and facilitating trade.

The Dallas-Fort Worth region is particularly noteworthy as it significantly contributes to Texas’s labor market. This urban area accounts for approximately 30% of the state’s workforce, reinforcing the economic foundations of Texas.

As the business landscape continues to evolve, Texas remains a significant player while facing increasing competition. The state must address its quality-of-life challenges to maintain and improve its status as a leading destination for business and investment in the coming years.

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Author: STAFF HERE GEORGETOWN

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