Some work to do: Texas still tops the economy list, but CNBC’s broader ranking exposes gaps
Texas has grown used to winning. It regularly leads the country in corporate locations, expansions, CEO confidence and capital investment. By another measure, though, the Lone Star State has a problem it can no longer ignore.
CNBC’s annual ranking of America’s top states for business takes a broader look at competitiveness, and this year Texas slipped to fourth place from second a year earlier. That is not a collapse, but it is a clear warning: the state’s economic strengths remain real, while the weaknesses underneath are getting harder to dismiss.
CNBC does not simply reward job growth or gross domestic product. The ranking evaluates 138 metrics across 10 categories, with weights based on how often states emphasize those attributes in their own economic development materials. In effect, states are being judged on how well they make their case — and then on whether the facts back it up.
Infrastructure carries the heaviest weight. That includes traditional roads, waterways, rail, bridges and air travel, but also affordable power, reliable water, broadband access, large-scale computing capacity and the speed of getting projects from shovel to construction. Texas ranks 12th in this category, an improvement over recent years but still short of where its ambitions suggest it should be.
The state performs best in the categories tied most directly to today’s economic momentum. Texas ranks second in economy and first in workforce, a measure that looks at STEM concentration, educational attainment, productivity and the ability to attract skilled workers. It also comes in third for technology and innovation and fifth for cost of doing business.
The darker numbers show up in areas that increasingly drive where companies and workers choose to put down roots. Texas ranks 49th in quality of life. That category includes health-care access, availability and affordability of child care, environmental quality and whether state laws prevent discrimination that can limit opportunity. It also includes reproductive rights, which have become a significant factor in relocation decisions. Surveys indicate that almost two-thirds of younger workers would be unlikely to live in a state with substantial restrictions.
Education is another concern. Texas ranks 32nd, with the score based on test results, class size, spending, the number of colleges and universities, and the range of community college and career-training programs.
None of these weaknesses is likely to derail the Texas economy immediately. But they threaten to undermine it over time. It is difficult to maintain the nation’s top-ranked workforce while education slips further below average and quality of life pushes potential residents — and future employees — to look elsewhere.
Texas improved to second place in the previous CNBC ranking and has now fallen to fourth. That is not a dramatic drop, but it is a signal that the model that carried the state for years may need more work than many leaders acknowledge. Ensuring prosperity, opportunity and sustainability for the next generation of Texans means confronting the parts of the scorecard that no amount of payroll growth can hide. There is work to do.