Southern states dominated the latest annual Site Selection magazine survey for the best business climate in the U.S. Texas and North Carolina stood out with two cities each ranking in the top 10 for corporate headquarter relocations. Dallas claimed the top spot, with Austin following in sixth place. Meanwhile, Charlotte and Raleigh secured second and fifth places, respectively.
A surprising turn of events saw Texas lose its long-held top ranking to Georgia, which claimed the top spot this year. North Carolina and South Carolina rounded out the top three, with Texas tying with Tennessee for fourth place. Virginia, Alabama, Mississippi, Ohio, and Indiana completed the top 10 states recognized for their business-friendly climates.
The majority of top cities for business headquarter relocations were in the South. Dallas led the pack, with Charlotte, Atlanta, Nashville, Raleigh, Austin, Chicago, Richmond, Memphis, Phoenix, and San Diego following suit. Dallas Mayor Eric Johnson attributed the city’s success to its thriving economy and Texas’ reputation as an ideal state for business.
Site selectors tend to favor Southern states due to their superior workforce, tax policies, and cost of living, as well as attractive incentives, quality of life, and worker training programs. These states also benefit from strong logistics and infrastructure advantages, making them appealing for various projects.
This year’s survey involved 36 site selectors who assessed factors like business climates, access to innovation hubs, and power availability. California and New Jersey were considered to have the worst business climates, while South Carolina, Ohio, and Michigan were praised for their manufacturing workforce.
The top five Southern states received the majority of client inquiries and location research, with notable investment in site readiness, workforce training, incentives, and favorable tax policies. John Boyd Jr. of The Boyd Company Inc. emphasized the South’s success in business climate due to demographic shifts, lower costs, sound tax policies, and efficient economic development practices.
South Carolina’s top ranking for the best manufacturing workforce was attributed to various factors, including economic development infrastructure and inventory availability.
One of the key factors contributing to the success of southern states in attracting businesses is the presence of a top-notch workforce training program called readySC. This program, which is closely integrated with the state’s network of technical colleges, plays a crucial role in preparing skilled workers for the demands of the modern economy. In addition, the excellent labor-management relations climate in these states further enhances their appeal to businesses looking to set up operations in the region.
Jay Garner, the president of Atlanta-based Garner Economics LLC, highlighted the efforts made by the legislatures of the top five ranked southern states to create a business-friendly environment. These states have consistently ranked well in the Tax Foundation’s annual tax competitiveness index, reflecting their commitment to supporting businesses through favorable tax policies. In contrast, states like California and New Jersey face challenges due to their high tax rates, which can deter businesses from investing in those regions.
Looking ahead over the next decade, site selectors identified several key workforce challenges that will need to be addressed. These challenges include labor shortages, the availability of affordable housing for workers, the need for upskilling programs to ensure workers remain competitive in the job market, access to quality childcare services, and the importance of developing soft skills among the workforce. Addressing these challenges will be crucial in ensuring that businesses have access to the skilled talent they need to thrive in the evolving economic landscape.
