On the question of whether a recession is unavoidable or if the American economy is destined for a soft landing, economists are becoming increasingly split. The stock market is up, the labour market is still robust, and even though consumer demand is declining, many Americans continue to spend money. The inflation rate is trending lower. Whatever occurs will have a varied impact on different states.
The economies of certain states are better positioned than others to negotiate the upcoming turns. Companies are closely monitoring developments as they choose where to conduct business. Additionally, America’s Top States for Business is keeping track of everything. This year, the Economy category has one of the highest weights in our methodology.
In order to identify the states with the strongest economies, we consider state finances, annual job growth, and overall economic growth on a percentage basis. We also consider the state of the housing market as a whole. We count the number of large firms with their corporate headquarters in each state to determine how diverse their economies are. Additionally, starting in 2023, we will be assessing the entrepreneurial economy based on the creation of new businesses.
A recession could severely hurt the economies of some states, which are already in trouble. But the 10 states mentioned below are well-prepared to deal with practically whatever the national economy throws at them.
The economy of the Sunshine State is booming. With employees pouring into the state, overall growth is among the strongest in the country, and the employment market reflects this. Florida’s notoriously boom-and-bust-prone housing industry is currently in a state of equilibrium. With a 15% annual rate of price growth, building is brisk, and foreclosed homes are few and far between. The cost of living is starting to become a problem, and the insurance market is unstable. However, for the time being, the state with America’s strongest economy has a promising future.
Nearly 630,000 new jobs were added in the Lone Star State in 2016. Non-farm payroll growth of 4.8% was one of the best in the country. Only California and New York have more large firms headquartered in Texas, where the economy is expanding at a Texas-sized pace. State finances are strong.
As it continues to attract businesses, residents, and jobs, the Tar Heel State is far ahead of the competition. The housing market in North Carolina is still balanced, despite some increasing pains. Although prices increased by more than 13% last year, builders kept up. Homeowners are also, with little foreclosure activity.
The Peach State’s economy is varied and thriving, and it is home to well-known brands like Home Depot, Coca-Cola, and Delta Airlines. Georgia’s state finances are good, and despite a lot of new buildings, housing values are rising by about 11 percent annually. However, the number of foreclosures is beginning to rise.
Another success story is the Volunteer State, which had the second-fastest economic growth in the country last year thanks to durable goods production. However, as the year progressed, activity started to level off. Tennessee’s economy is booming, and the state’s finances are solid.
The Beehive State’s economy never seems to slow down. According to a review of state financial statistics by CNBC, state finances are almost as excellent as they get. It has excellent credit standing. As Utah’s mining industry and digital economy continue to expand, jobs are being created.
The Palmetto State is a popular place for business startups. South Carolina placed in the top 10 for the most startups per capita in 2021 with around 96,000. Even though homebuilders gradually increased the supply, the state came in third for housing price growth last year. However, as the state is not home to any S&P 500 corporations, business possibilities can be few.
Idaho’s economy grew the fastest in the country last year, and employment growth was among the best, driven by the booming real estate and IT sectors in the Gem State. As they move to Idaho from more expensive states like California, Idaho’s numerous new citizens are launching new enterprises at a rapid rate. However, the rapid expansion is causing some stress. According to Attom Data Solutions, this is especially clear in the hot property market where foreclosures are on the rise.
Even while Indiana’s economy isn’t exactly booming, it is stable. That is definitely a benefit now. According to the Federal Housing Finance Agency, home prices are rising by about 10% annually, but according to the National Association of Realtors, housing in this area is still among the most inexpensive in the country. The state’s debt is rated highly.
First State’s business laws and court system have made it a popular place to incorporate a firm for well over a century. And Delaware really gains when entrepreneurship flourishes, as it did after the pandemic. According to the most recent available annual data from the Census Bureau, new business formations increased by 44% in 2021. Delaware has excellent credit standing and sound governmental finances.
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