Forbes Best States For Business: See Illinois' Ranking

ILLINOIS — Illinois ranks a not-so-stellar 39th in the country for business climate, according to a new report from Forbes. The American business magazine published its 13th annual “Best States For Business” rankings Wednesday.

Forbes said the rankings were calculated based on more than 40 metrics spanning six categories: business costs, labor supply, regulatory environment, economic climate, growth prospects and quality of life.

In the rating of all 50 states, Illinois fell between New Jersey and Connecticut in Forbes’ overall rankings. Here’s a breakdown:

Business costs

• Rank: 30

Labor supply

• Rank: 33

Regulatory environment

• Rank: 39

Economic climate

• Rank: 31

Growth prospects

• Rank: 40

Quality of life

• Rank: 15

Forbes noted that migration out of the state remains high, with nearly 70,000 residents leaving in 2017, and state finances are dismal:

"Illinois is home to 69 of the 1,000 biggest companies in the U.S. by revenue—fourth most among states. They include Boeing, Abbott Labs, Caterpillar and Kraft Foods. However, the net migration rate out of the state remains high and projected population growth is negative. The state’s finances are also in shambles: in June 2017, Moody’s downgraded Illinois’ credit rating to Baa3—lowest in the country among the states—and maintained its negative outlook. 'After eight downgrades in as many years, Illinois' rating is an outlier among states, most of which are rated at least eight notches higher,' according to the report. It is the lowest rating ever for a U.S. state."

Forbes also offered these stats for the Land of Lincoln:

• Population: 12,802,000
• Governor: Bruce Rauner
• Median Household Income: $62,881
• Job Growth (2018): 0.9%
• Cost of Doing Business: 2% below nat'l avg
• College Attainment: 34.4%

The nationwide rankings suggest business people ought to consider moving to North Carolina, which topped the list for the second consecutive year. The authors praised “The Tar Heel State” for its high net migration rate. Many more people have flooded into the state than have exited, the authors said. The state also has one of the smallest number of unionized workers in terms of percent of total employment.

“The resulting benefit is labor costs that are 9 percent below the national average — sixth lowest in the country,” the magazine wrote.

Here are the top 10 states for business:

1. North Carolina
2. Utah
3. Texas
4. Virginia
5. Nebraska
6. Georgia
7. Florida
8. Colorado
9. Minnesota

Two years ago, North Carolina supplanted Utah as the best state for business. Utah had claimed the top spot six times in seven years from 2010-16, but dipped last year due to increasing business costs and weakening economic outlook, Forbes said. But the state remains one of the best due to its business-friendly climate, low energy costs and increasing employment.

On the other hand, Alaska, West Virginia, Maine, Vermont and Hawaii were, respectively, the worst states for business. Alaska’s economy is dependent on oil and gas — which account for more than 80 percent of the state’s revenue — and the drop in oil prices has hurt the state’s economy, Forbes said.

“Alaska's economy shrunk faster than any other state over the past five years (down 2.6 percent per year), and net migration out of the state also ranks worst in the nation,” according to the report.

The state’s employment outlook also ranked dead last over the next half-decade, with Alaska not expected to net any jobs.

Click here to read the methodology.

Patch national staffer Dan Hampton contributed to this report.

Photo credit: Spencer Platt/Getty Images