A new study finds Arizona is the No. 15 best state to succeed in business.

Harrington Group International released a study on the Best and Worst States to Succeed in Business after analyzing data from the Bureau of Labor Statistics, Census Bureau, and the Bureau of Economic Analysis data from 2020 to 2022.

The rankings were determined by analyzing nine factors in three main categories: workforce and consumer habits, business culture, and financial climate. The nine factors include job growth, net migration of educated workers, consumer spending, business growth rate, startup survival rate, business self-assessment survey, GDP growth, credit rating, and income tax burden.

Florida is the No. 1 best state to succeed in business followed by Texas and Tennessee. These states saw above average growth rates for jobs and gross domestic product, strong consumer spending, influxes of educated workers and low levels of corporate and personal income taxes.

Meanwhile, Connecticut, Illinois, and New York, were the three bottom states overall for a variety of reasons: No. 51 Connecticut has below average job growth and gets a larger share of its tax revenue from income taxes, while Illinois and New York are both losing educated workers to other states.

Business owners are grappling with a historic period of economic uncertainty. The Bureau of Labor Statistics reported this month that unemployment fell to 3.5%, the lowest level in 50 years and consumer confidence rose for the second straight month.  However, inflation remains high at 2.7% and the number of open jobs decreased by 1.1 million which may signify a cooling of the job market as the Fed raises interest rates.  Of course, the prospect of a potential recession looms large over everyone.

Key Findings

• No. 15 Arizona: Jobs (+3.7%), Net Migration of Educated Workers (+47,005), Consumer Spending (+13.1%), Startup Survival Rate (49.8%), GDP (-1.9%), Credit Rating (AA), Income Tax Revenue (35.7%).

• Four Largest Economies – Net Migration of Educated Workers: New York: -162,377, California: -190,046, Florida: +133,518, Texas +61,992.

• 10 Best States: Florida, Texas, Tennessee, South Dakota, Idaho, Montana, South Carolina, North Carolina, Nevada, and Oregon.

• 10 Bottom States: Connecticut, Illinois, New York, Kansas, D.C., Hawaii, New Hampshire, California, Missouri, and Louisiana.

• National Outlook: The business environment isn’t so bleak at the national level. Employment has risen over the past year, at 4%, while more than a third of business owners say their companies are doing better than usual and compared with a decade ago, startups are more likely to stay in business, with a five-year survival rate of 50.3%.

Complete state-by-state and national breakdowns are available in the complete study.