Texas ranked second in the U.S. on Forbes’ 2019 Best States for Business annual report, after North Carolina and ahead of Utah.
Virginia and Florida rounded out the top five, signifying a huge improvement for Florida.
With 28.7 million residents, and more than 14 million workers, Texas ranked first for growth prospects, third for business costs, and fourth for economic climate among the categories analyzed.
Forbes has rated business climates of 50 states since 2006. The 14th annual report compared 40 metrics across six main categories: business costs, regulatory environment, economic climate, growth prospects and quality of life.
Since 2006, this is the third time Texas has ranked second; last year it ranked third. North Carolina ranked first this year for the fourth time since 2006. Utah and Virginia are the only other two states that have ever claimed the top spot. Utah ranked first six times; Virginia, five times.
According to Moody’s Analytics, Texas businesses are expected to add nearly one million new jobs by 2023, boosting the state to holding the third-highest average annual job growth rate in the country.
“Businesses thrive here because of our excellent geographic location, highly skilled workforce, low tax burden, reasonable cost of living, predictable regulatory environment and our reputation for having a truly business friendly climate,” the Texas Economic Development Corporation says.
Texas added about 300,000 new jobs in 2019, the corporation says, with roughly one third in the Dallas-Fort Worth area. The state unemployment rate is at a record low of 3.4 percent, and CEOs have ranked Texas as the best state for business for 15 years in a row, the corporation adds.
Only three states – California, New York and Washington – saw more venture capital dollars flow in in 2018 and 2019 than Texas, according to Price Waterhouse Coopers.
Over the last 12 years, Texas remains the primary destination for companies leaving California. With no state personal income tax or corporate income tax, Texas continues to draw businesses from California and its higher taxes.
The share of Texans who started new businesses last year was the fourth highest in the country, according to data produced by the Kauffman Foundation.
“Texas is the most exceptional state in America,” Texas Gov. Greg Abbott said. “Our economy is booming, keeping Texas the best place to live. With unemployment at a record low in Texas, payrolls are growing. San Antonio, McAllen, Austin & El Paso are surging ahead of the state.”
According to the Texas Office of Business and Community Development, “Texas continues to have one of the highest economic clout growth ratings for women-owned businesses.”
Other states on the list showing gains include 21st-ranked Wisconsin, which moved up 11 spots, and 25th-ranked New Hampshire, which moved up nine spots. Ohio dropped nine spots to 29th, after peaking at 11th in 2016.
Alaska ranked last for the second year in a row due to its continued shrinking economy, and greatest rate of net migration in the nation.