Virginia is no longer considered the best state for business on CNBC’s annual ranking after five years in the top three. The Commonwealth landed at No. 4, ceding last year’s first-place spot to North Carolina.
Virginia was in first place in 2024, second place in 2023, and third place in 2022. This is the lowest Virginia has ranked on the list since 2018.
The reason? CNBC says it could be an effect of the Trump administration’s sweeping cuts to the federal workforce. The state economy is the most heavily weighted factor in the annual ranking. Virginia’s score dropped from 11th to 14th place in that category.
CNBC made note that last year, the federal government accounted for more than 144,000 jobs in Virginia. In May, Virginia’s unemployment rate hit 3.4 percent, making it one of only three states whose unemployment rose. The Weldon Cooper Center for Public Service predicted that Virginia would lose 32,00 jobs this year.
Still, Gov. Glenn Youngkin has asserted that there are plenty of jobs in Virginia. He launched the Virginia Has Jobs site in February, which advertised more than 250,000 job openings. Today, that site has about 199,000 jobs listed.
As the workforce transitions from layoffs, University of Virginia economist Eric Scorsone told CNBC that he predicts there may be some “ripple effects” to the economy as people spend less on leisure and retail.
Virginia still had an impressive showing in the ranking this year in other categories. In the education section, for example, it landed the top ranking. In infrastructure, it was second-best.
And CNBC says that the Commonwealth is still a great place for business. “Over time, no state has performed better than Virginia in the CNBC rankings. The state has taken top honors six times since the project began in 2007,” it said.
North Carolina was the top state for business, in recognition of its “solid economy, a world-class workforce, and a wealth of corporate hospitality,” CNBC said. Texas took the No. 2 spot, followed by Florida.
Youngkin Blames CNBC
Youngkin spoke out about the rankings, blaming CNBC’s methodology for the drop.
“CNBC’s new methodology this year is thrown off by a new subjective metric that mistakenly ascribes substantial risk to Virginia from the federal government’s presence in the Commonwealth,” he said in a statement on X.
He said the list failed to recognize Virginia’s private sector growth and the fact that “the federal government’s presence is heavily weighted to Defense and National Security, which are getting more funding, not less.”
“Our AAA bond rating was just reaffirmed while neighbors like Maryland and DC were downgraded. Our rainy day fund is among the best resourced in the nation. It is our financial and economic strength that CNBC simply missed this year,” Youngkin said. “By the objective metrics, Virginia is still the best state to start or grow your business.”
But some Virginia Democrats are turning the blame to Youngkin. Abigail Spanberger, the Democratic candidate for governor, posted on X. She said the drop was “in part due to Donald Trump’s attacks on Virginia jobs and the Youngkin-Sears Administration’s refusal to stand up to him.”
Rep. Don Beyer also posted. “Gov. Youngkin defended mass firings in our Commonwealth, and Lt. Gov. Sears went so far as to mock Virginians who lost their jobs,” Beyer said. “This is what happens when Trump slams Virginia’s economy and our leaders who should stand up to him cheer him on instead.”
Correction: A previous version of this post mistakenly stated that Virginia had been in first place for the past three years.
Feature image, stock.adobe.com
