North Carolina Has the Nation’s Top State Business Climate in 2021

November 1, 2021

Site Selection magazine has named North Carolina as the state with the Top Business Climate in the U.S. The state tied with Georgia for the honor last year, and has frequently appeared in the upper echelon of state business climates ever since enjoying a six-year run in the top spot from 2005 through 2010. The November 2021 issue of the magazine lists the top 25 state business climates based in part on a survey of corporate real estate executives and in part on an index of criteria derived primarily from data in the Conway Projects Database. Georgia is No. 2 this year, with Texas, Ohio and Indiana rounding out the top five states. South Carolina, Kentucky, Tennessee, Arizona and Virginia round out the top 10.

The executive survey portion of this year’s rankings has Texas in first place followed by a tie between Florida, Georgia and North Carolina for second, with South Carolina at No. 5.

“North Carolina consistently ranks high on our list of top business climates, tying for first place with Georgia in 2020 for example,” says Mark Arend, Editor in Chief of Site Selection. “But it claims first place by itself this year with the blend of location ingredients required by capital investors in key industry sectors. We congratulate the state level and local economic developers throughout North Carolina for working to cultivate a business climate that is the best in the U.S.”

In a survey published with the rankings, workforce skills repeated this year as the most important criteria to site selectors for the sixth year in a row, with transportation infrastructure at No. 2. Workforce development, ease of permitting and regulatory procedures and utility cost and reliability rounded out the top five criteria.

“Fifty percent of the overall Business Climate Ranking is based on a survey of corporate site selectors who are asked to rank the states based on their recent experience of locating facilities in them. The other 50% is based on an index of seven criteria: performance in Site Selection’s annual Prosperity Cup ranking (May 2021); total Conway Projects Database-compliant facilities in 2020; total new facilities in 2020 per capita; total 2021 new projects year-to-date; total 2021 projects year-to-date per capita; and corporate and property tax data from the Tax Foundation’s State Business Tax Index.

Top FTZs, Top Ohio River Corridor Metros
The November 2021 issue also ranks the top U.S. Foreign-Trade Zones and top states for FTZ economic impact using an index derived from figures in the U.S. FTZ Board’s annual report to Congress released in August. Calculations based on a number of Top 25 rankings derived from the zones’ operations data were used to develop the index of Top 10 U.S. FTZ States & Territories by FTZ Economic Impact. Using figures representing ranges of merchandise received, exports and jobs at all 261 FTZs across the nation, we devised an indexed ranking representing the Top 20 U.S. FTZs in Combined Economic Impact. (See full lists below.)

In the individual zone category, the Port of South Louisiana’s FTZ 124 in Gramercy ranks No. 1, followed by San Jose’s FTZ 18 in California at No. 2 and then FTZ 78 in Nashville at No. 3. With four of the top 20 FTZs, Texas leads our list of Top 10 States, followed by California, Louisiana, South Carolina and Tennessee. The feature also includes a look at international free zone best practices from Zoë Harries, partner and director at Dubai-based EZDA.

The November 2021 issue also includes our annual look at top Ohio River Corridor metros for project wins over the preceding 18 months, evaluating their capex and job creation numbers on a cumulative and per-capita basis. With more than $3 billion in corporate facility investments and more than 10,600 jobs associated with those projects, the Cincinnati region leads the way, followed by fellow bi-state regions in Louisville and Evansville (top 10 below).

Site Selection magazine, published by Conway Inc., delivers expansion planning information to 45,000 executives of fast-growing firms. The senior publication in the corporate real estate and economic development field, Site Selection and its affiliated e-newsletters are also available at www.siteselection.com. Headquartered in Atlanta, Georgia, Conway since 1954 has been a trusted advisor to corporations, governments and economic development and investment promotion agencies around the world, and in 2017 was named the Top International Company of the Year (Small Business) by the Georgia International Awards. Conway owns and manages Conway Events, Conway Custom Publishing and Conway PR & Marketing. Conway also manages the Industrial Asset Management Council.

TOP 10 STATE BUSINESS CLIMATES 2021 (2020 rank in parenthese)

1. North Carolina (T1)
2. Georgia (T1)
3. Texas (T4)
4. Ohio (3)
5. Indiana (12)
6. South Carolina (T4)
7. Kentucky (9)
T8. Arizona (T7)
T8. Tennessee (10)
T10. Virginia (6)
T10. Alabama (T7)

EXECUTIVE SURVEY BUSINESS CLIMATE RANKINGS 2021(2020 rank in parentheses)

Texas (1)
T2. Florida (NA/out of top 10)
T2. Georgia (4)
T2. North Carolina (T2)
5. South Carolina (T2)
6. Tennessee (5)
7. Alabama (NA)
8. Mississippi (NA)
9. Indiana (NA)
T10. Missouri (NA)
T10. Ohio (6)
T10. Virginia (10)

SITE SELECTORS’ TOP LOCATION CRITERIA FOR 2021 (2020 rank in parentheses)

1. Workforce skills (1)
2. Transportation infrastructure (3)
T3. Workforce development (2)
T3. Ease of permitting and regulatory procedures (4)
5. Utilities (cost, reliability) (7)
6. Right-to-work state (NA/out of top 10)
T7. Higher education resources (7)
T7. State and local tax scheme (NA)
T9. Economic development strategy (NA)
T9. Land/building prices and supply (NA)

Source: Site Selection survey of corporate site selectors, October 2021