Last week, CNBC released its annual rankings of America’s Top States for Business in 2023. Virginia, closely following North Carolina, ranked second in the list of 50 states across ten broad categories of competitiveness. Just seven years ago, Virginia ranked 13th in the same rankings of top states for business. This climb to second place is commendable and speaks to the many investments made over the years into attributes that make Virginia a great place for business. Among the ten categories, Virginia did exceedingly well in the areas of Education, Access to Capital, Business Friendliness, Workforce, and Infrastructure. On the other hand, the categories of Cost of Living and Cost of Doing Business impacted the state’s rankings on the downside.
While Virginia has been in the top three of these rankings for the past three years, now is the time to keep the momentum going. The workforce is the most essential aspect that contributes to a state’s business favorability. Businesses move their operations to hubs with a workforce that will meet their needs. Many of the firms located in Virginia are in the professional and technical services sector, which tends to seek well-educated and highly skilled workers. Well-established patterns of educational attainment along with the prevalence of state worker training programs and right-to-work laws make a state desirable for business. Virginia ranked the highest when it comes to Education, which explains the advantage that Virginia provides to businesses as they make decisions about the state in which to establish their operations. However, ultimately, cost of living plays an important role in people’s decisions about living in a specific state or moving away. Currently, Virginia ranks 25th in terms of cost of living. Evidence from migration related data suggests that some people are starting to move out of Virginia to other states with more housing options. If this pattern holds, over time Virginia runs the risk of having increasing housing costs and inventory tightness eroding its current standing as one of the top states for business in the country.
The saying goes that a home is where a job goes to sleep at night. Thus, it is essential to focus on the housing availability and affordability in the commonwealth, so the workforce continues to stay strong and attract more business investment going forward. This will eventually ensure that Virginia’s attractiveness as a great state for business remains intact despite the economic uncertainty across the country.