This year’s Most Improved State for Business is Indiana, which jumps 13 places to number 13. Indiana improved in eight of our 10 categories, with its biggest jump in the Economy category, rising to number 37 from number 48. Indiana’s reliance on commodities—both agricultural and industrial—helped improve the state’s economy from its near-bottom ranking last year. Other big movers:
South Dakota, with the best Cost of Doing Business, rises to number seven overall from number 18; and Illinois, riding the commodity boom, rises nine spots to number 30 overall. On the flip side, Florida, hit hard by the foreclosure crisis, tumbles to number 17 from number 8 last year.
Maryland also drops nine places to number 36. New York(number 26) and Alabama (number 42) both drop five places.
Two Sides To The Economy
There were some big moves in the “internals” this year as well. Did you know that Oklahoma has one of the fastest growing economies in the nation? That surprised us at first, but it stands to reason. The state’s economy is heavily dependent on energy, after all. Oklahoma’s Gross State Product grew more than 7% in 2007, according to the Bureau of Economic Analysis, and 10.8% in 2006. That growth propelled Oklahoma to a number 3 ranking in our Economy category, compared to number 26 last year.
On the flip side, Georgia, which drops out of our overall Top Five this year, can blame the economic slowdown—especially the housing crisis. Slowing growth turned the 18th-ranked Economy in our study last year into number 31 this year. Ouch.
Stuck At The Bottom
One thing that hasn’t changed in a year is America’s Bottom States for Business. Alaska, which repeats at number 50, couldn’t capitalize on the energy boom to outweigh its negatives in cost and location. Hawaii, at 49, at least gets a consolation prize: it’s Hawaii!
Just like last year, our study rates the states on the very selling points they use to attract business. To maintain consistency, we measured the same factors as in 2007. The states are ranked on 40 metrics in ten broad categories, weighted based on how frequently they appear in state economic development marketing literature.
Of course, different businesses have different needs, and every state has something different to offer. In business, one size doesn’t fit all. But our study shows some states are more competitive than others, and competitiveness, from year to year, is a moving target.