CNBC released its annual rankings of America’s Top States for Business in 2025 last month. Virginia ranked fourth in the list of 50 states across 10 broad categories of competitiveness, inching down from first place in the rankings last year. Let’s understand which categories contributed most towards Virginia’s score and which ones have scope for improvement in the coming years.

Top scoring categories: Education (Grade: A+), Infrastructure (Grade: A+), Business Friendliness (Grade: A-)

The education system is a key consideration for companies and families deciding where to put down roots. Virginia ranked the highest in terms of education across all states in the country, which highlights the major draw for businesses looking to establish their operations. Infrastructure, which is the second highest weighted category this year, was one of Virginia’s top-ranking categories. This stands as proof to the investments made over the years in strengthening the state’s transportation system, utility infrastructure, availability of vacant land, office, and industrial space, and climate change readiness. Moreover, Virginia’s business friendliness in the form of its attractive legal and regulatory requirements along with opportunities for growth and expansion also contributed positively.

Medium scoring categories: Quality of Life (Grade: B-), Technology & Innovation (Grade: B+), Access to Capital (Grade: B), Economy (Grade: B-)

The quality of life component for Virginia saw a marked improvement, going from ranking 19th last year to ranking 8th in the country. This represents improvements made in terms of crime rates, environmental quality, health care, childcare options, worker protections, as well as inclusivity. Virginia’s support for technology and innovation has also contributed positively to its ranking, and this category’s ranking went up from 15th in the country last year to 8th this year. Access to capital, although one of the smallest shares of the total ranking score, indicates how easy it is for companies to secure financing through a variety of methods. Virginia’s ranking for economy, the heaviest weighted category in the study, dropped from 11th place to 14th. This is mostly due to the heavy presence of the federal government and related sectors in the commonwealth, which is facing considerable cuts to its workforce. This is also likely to have a ripple effect on other sectors in the state’s economy such as leisure and retail.

Low scoring categories: Workforce (Grade: B-), Cost of Living (Grade: C+), Cost of Doing Business (Grade: C+)

The workforce category has dipped in its ranking from 9th last year to 14th this year. Businesses prefer to operate in places with a workforce that will meet their needs. A loss in quality workforce due to higher living costs or a suffering economy is detrimental to the state’s overall attractiveness. More efforts should be directed towards attracting talent at all levels and retaining it in the state. Increasing cost of living due to costlier housing and other expenses is negatively impacting the decision-making process of families and could make Virginia less attractive to businesses. Lastly, cost of doing business is the lowest ranked category for Virginia and has suffered significantly since last year, dropping from 24th to 31st position. While making long-term business decisions, companies will continue to prefer states that are business tax friendly and that provide incentives which reduce their expenses.

Recent weaknesses in workforce conditions and the possible impact of the housing shortage on cost of living have contributed to the dip in Virginia’s rankings. But investments made over the years continue to keep Virginia among the top five states for business across the United States. Continued efforts are required to make sustainable advances in various categories to improve Virginia’s standings in the list in the coming years.

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