To compile the listing, Forbes.com ranked the 50 states on 30 metrics in six main categories: business costs, economic climate, growth prospects, labor, quality of life and regulatory environment.
While Virginia has been No. 1 each of the three years that the ranking has been published, this year its lead over No. 2 Utah was thin, and the top five states were all bunched together, according to Forbes.com.
Driven by higher labor costs, business costs in Virginia jumped, and are now approaching the national average, according to the survey. The biggest factor closing the gap between Virginia and everyone else was lower growth projections for the next five years, the survey said.
On last year’s list, Virginia ranked No. 8 in the growth-prospects category. This year, lowered expectations for growth in jobs, income and gross state product knocked Virginia's growth-prospects ranking down to No. 26.
However, the commonwealth remains an excellent location for new or existing businesses, the survey said. It has the best regulatory environment, the No. 2 incentive program and the No. 5 tort atmosphere. Other advantages for expanding companies include energy costs that are 30 percent below the national average, an educated work force prompted, in part, by its proximity to Washington, D.C., and top colleges like the University of Virginia and William and Mary.
“Virginia has long enjoyed a business-friendly climate,” said Gov. Timothy M. Kaine. “The commonwealth’s regulatory and legal environments are tough to beat, as well as our strong, educated labor force. This best-in-nation validation speaks volumes to our competitiveness in today’s global market.”
States making the biggest jump include Montana (No. 42 in ’07 vs. No. 24 in ’08), Oregon (No. 28 in ’07 vs. No. 16 in ’08), New Mexico (No. 26 in ’07 vs. No. 15 in ’08), Georgia (No. 15 in ’07 vs. No. 5 in ’08), Hawaii (No. 37 in ’07 vs. No. 27 in ’08), and Alabama (No. 35 in ’07 vs. No. 28 in ’08).
Maine, Michigan, Alaska, Louisiana and West Virginia (No. 50) were at the bottom of the listing.
State Rankings
1. Virginia (1)*
2. Utah (2)
3. Washington (5)
4. North Carolina (3)
5. Georgia (15)
6. Colorado (8)
7. Idaho (6)
8. Florida (7)
9. Texas (4)
10. Nebraska (17)
11. Minnesota (10)
12. Delaware (11)
13. North Dakota (9)
14. Maryland (12)
15. New Mexico (26)
16. Oregon (28)
17. Tennessee (13)
18. Arizona (18)
19. Nevada (22)
20. New Hampshire (14)
21. Kansas (20)
22. Iowa (24)
23. South Dakota (25)
24. Montana (42)
25. Indiana (27)
26. Oklahoma (30)
27. Hawaii (37)
28. Alabama (35)
29. South Carolina (23)
30. Missouri (16)
31. Wyoming (29)
32. Arkansas (21)
33. Connecticut (31)
34. New Jersey (19)
35. Illinois (40)
36. Massachusetts (36)
(tie) Vermont (32)
38. New York (33)
39. Ohio (38)
40. California (34)
41. Pennsylvania (39)
42. Mississippi (43)
43. Wisconsin (44)
44. Kentucky (41)
45. Rhode Island (45)
46. Maine (48)
47. Michigan (46)
48. Alaska (47)
49. Louisiana (49)
50. West Virginia (50)
* 2007 ranking
Source: Forbes.com ranking of Best States for Business
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