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- While the odds of a U.S recession have fallen sharply in the last year, companies are still looking to set up shop in states with solid economies.
- With states loudly touting their own economic strength, Economy is one of the most important categories in CNBC’s annual competitiveness study, America’s Top States for Business.
- Several states stand out for their economic strength this year, based on factors including job growth, strong housing markets and healthy budgets with relatively lows levels of public debt.
Maybe the U.S. economy has dodged a bullet.
A little over a year ago around this time, more than half the economists responding to the CNBC Fed Survey predicted a recession within the next year. They were wrong, but that is not to say that the economy does not still face risks. Those risks include inflation, geopolitical tensions, and markets that many cautious investors believe are priced to perfection.
That helps explain why states continue to market themselves to businesses as the ideal places to weather an economic storm.
“Iowa is home to a diverse economy, driven by key industries of advanced manufacturing, biosciences and finance and insurance,” the state’s economic development website proclaims.
“Florida has one of the largest economies in the world, with key industries including aerospace, logistics, manufacturing and defense,” the state notes. “Its diverse economy supports innovation, supply chain growth and global trade.”
CNBC’s analysis of all 50 states’ economic development marketing pitches as part of this year’s America’s Top States for Business study finds economic factors are the second-most frequently mentioned attribute, behind infrastructure. As a result, under this year’s methodology, Economy is the second-most heavily weighted category for 2026, accounting for 16.6% of a state’s total score.
To score each state’s economy, we consider a variety of factors including economic growth, job growth and the number of major companies headquartered in the state. We also measure each state’s fiscal health including its budget situation, its long-term obligations and its debt ratings, as well as the health of the residential real estate market. We also consider the impact of tariffs, the potential impact of federal budget cuts, foreign direct investment, and small business survival rates.
While some states are flashing economic warning signs, these ten states have what it takes to power through whatever the U.S. economy throws their way.
10. Wisconsin
A general view of Custer Farms during a roundtable on agriculture with U.S. President Donald Trump on June 5, 2026 in Chippewa Falls, Wisconsin. Samuel Corum | Getty Images
Wisconsin has seen a surge of new business formations since the pandemic, according to a study released in May by the Wisconsin Policy Forum. Researchers noted a 20.2% increase in new small businesses in the Badger State between 2020 and 2025. And those new businesses have staying power. According to data compiled for CNBC by research firm Construction Coverage, Wisconsin ranked No. 12 in an index of one-, two- and three-year new business survival rates. Wisconsin’s large agricultural economy, whose significant exposure to China clouded the state’s economic picture last year, benefited from the Supreme Court ruling in February invalidating many of President Trump’s “Liberation Day” tariffs.
2026 Economy score: 258 out of 415 points (Top States grade: B)
Real GDP (2025): $359.6 billion (+1.5%)
Debt Rating and outlook (Moody’s): Aa1, Stable
Share of state spending from federal funds: 26.8%
International goods trade (2025): $64 billion (13.6% of GDP)
Foreign direct investment (2024): $1.5 billion
Major corporate headquarters: Snap-On, Alliant Energy, Fiserv
9. Ohio
The Bitdeer Technologies Group cryptocurrency mining data center under construction in Massillon, Ohio.Justin Merriman | Bloomberg | Getty Images
Ohio‘s strong economy contributes to its overall showing as America’s Top State for Business in 2026. Ohio ranks third in the nation for foreign direct investment, according to the Commerce Department. The state economic development organization, JobsOhio, notes that some 4,000 companies from 42 countries are operating in the state. The Buckeye State has a strong domestic corporate base as well, with 21 S&P 500 companies calling the state home.
Ohio’s credit rating is pristine, but there are some weak spots. Ohio could only last about 60 days on its total fund balance alone, according to the Pew Charitable Trusts. The housing market has seen relatively weak performance over the past five years, as measured by ATTOM Data Solutions figures on seller gains over the period. High property taxes haven’t helped.
2026 Economy score: 275 out of 415 points (Top States grade: B+)
Real GDP (2025): $734.4 billion (+1.7%)
Debt Rating and outlook (Moody’s): Aaa, Stable
Share of state spending from federal funds: 38.8%
International goods trade (2025): $143 billion (14.8% of GDP)
Foreign direct investment (2024): $7.8 billion
Major corporate headquarters: FirstEnergy, Procter & Gamble, GE Aerospace
8. Minnesota
A combine harvester prepares to unload soybeans into a grain truck during a harvest at a farm in Rochester, Minnesota.Ben Brewer | Bloomberg | Getty Images
A report by the state’s Chamber of Commerce in May said it was an “economic imperative” that Minnesota boost growth and close the gap with the national economy. “This gap is reflected across nearly every major macroeconomic indicator,” the report said. But there are some bright spots. While economic growth did still trail the national average last year, it improved solidly over the year before. The North Star State boasts solid credit and a good survival rate for small businesses, though not enough of them are being formed in the first place.
With a significant percentage of its foreign trade tied to China, Minnesota was another state that benefited significantly from the Supreme Court striking down President Trump’s emergency tariffs. Minnesota real estate showed solid appreciation last year, but housing remained affordable.
2026 Economy score: 278 out of 415 points (Top States grade: A–)
Real GDP (2025): $405.8 billion (+1.6%)
Debt Rating and outlook (Moody’s): Aaa, Stable
Share of state spending from federal funds: 30.9%
International goods trade (2025): $63.7 billion (12% of GDP)
Foreign direct investment (2024): $2.96 billion
Major corporate headquarters: Hormel Foods, UnitedHealth Group, Target
7. Delaware
Imagebroker/christopher Boswell | Imagebroker | Getty Images
With just 22.5% of its budget funded by federal dollars, according to the National Association of State Budget Officers — the fifth smallest percentage of any state — Delaware is reasonably well insulated from the whims of Washington. The First State’s finances are sound, with manageable pension obligations, according to the Pew Charitable Trusts, and a total balance that could carry the state for roughly five months if all else failed. Delaware is a famously friendly place to incorporate, but the number of new business formations is around average, according to Census Bureau data. And the state has one of the worst small business survival rates in the country.
2026 Economy score: 284 out of 415 points (Top States grade: A–)
Real GDP (2025): $87.3 billion (+2.3%)
Debt Rating and outlook (Moody’s): Aaa, Stable
Share of state spending from federal funds: 22.5%
International goods trade (2025): $15.9 billion (13.6% of GDP)
Foreign direct investment (2024): $829 million
Major corporate headquarters: DuPont de Nemours, Incyte, Qnity Electronics
6. South Carolina
Various BMW models are on display in a factory hall at the BMW plant in Spartanburg, South Carolina.Sven Hoppe | Picture Alliance | Getty Images
South Carolina‘s economy enjoyed a blowout year in 2025, tying with Florida for the best GDP growth and finishing in the top 10 for job growth. A big driver of that growth was a big influx of workers. The Palmetto State was third in the nation for net in-migration of college-educated workers last year, according to Census data. No state has a better survival rate for new businesses, according to Construction Coverage.
2026 Economy score: 286 out of 415 points (Top States grade: A–)
Real GDP (2025): $286.8 billion (+3.1%)
Debt Rating and outlook (Moody’s): Aaa, Stable
Share of state spending from federal funds: 33%
International goods trade: $92.8 billion (24.5% of GDP)
Foreign direct investment (2024): $2.6 billion
Major corporate headquarters: None
5. Washington
The Amazon headquarters in the South Lake Union neighborhood of Seattle, Washington, US, on Tuesday, Oct. 28, 2025.David Ryder | Bloomberg | Getty Images
Washington is a magnet for foreign investment and for entrepreneurs. That helped push the Evergreen State into the upper tier for economic growth. The state enjoys a strong bond rating, despite some lingering fiscal issues. Pew estimates Washington could only last about 28 days on its total balance, the shortest of any state. And the situation could get worse, according to the organization, since tax revenue has been coming in much lower than the long-term trend as the economy slows. In its June forecast, the state Office of Financial Management attributed the decline to slowing economic activity, including consumer spending and declining gas consumption in the face of higher fuel prices.
2026 Economy score: 287 out of 415 points (Top States grade: A–)
Real GDP (2025): $717.5 billion (+2.2%)
Debt Rating and outlook (Moody’s): Aaa, Stable
Share of state spending from federal funds: 25.2%
International goods trade: $112 billion (12.5% of GDP)
Foreign direct investment (2024): $2.3 billion
Major corporate headquarters: Costco Wholesale, Amazon, Microsoft
4. New York
Residential apartment buildings in New York, US, on Wednesday, June 24, 2026. Adam Gray | Bloomberg | Getty Images
New York enjoyed the third-highest economic growth in the nation last year, behind Florida and South Carolina. It was powered by the boom in financial markets, which disproportionately affects the Empire State’s economy, as well as the big buildout in AI. The twin booms have left the state with one of the best financial pictures in the country, as tax revenues outpaced recent trends.
This being New York, however, some aspects of the economy are on very shaky ground. The state leads the nation in out-migration of college-educated workers, according to Census figures. That is putting a serious damper on job growth, and it threatens GDP growth. It also might help explain why the rate of new business formation is so low. The housing market is plagued by a lack of affordability and high property taxes. For now, though, New York finds itself in a place it hasn’t been accustomed to in a while: the upper echelon of state economies.
2026 Economy score: 289 out of 415 points (Top States grade: A–)
Real GDP (2025): $1.89 trillion (+2.9%)
Debt Rating and outlook (Moody’s): Aa1, Stable
Share of state spending from federal funds: 38.7%
International goods trade: $352.8 billion (14.3% of GDP)
Foreign direct investment: $3.3 billion
Major corporate headquarters: International Business Machines, Citigroup, Pfizer
3. California
Contractors work on building a new house as survivors of the 2025 Eaton Fire hold a demonstration in Altadena, California, on June 29, 2026.Frederic J. Brown | AFP | Getty Images
California‘s perpetual boom-and-bust economic cycle has swung way into the boom phase for now, thanks to the surging stock market and the astounding growth of the AI economy. So, is a bust coming? Quite possibly, says the state’s nonpartisan Legislative Analyst’s Office, which warned in May that an unexpected $25 billion tax revenue windfall this year is likely “not sustainable.”
“Booms almost always come with an eventual bust,” the report said, declaring that the stock market appears to be in bubble territory. Never mind that after that report on May 7, the Dow Jones Industrial Average rose another 6% or so.
California’s economy does show some other warning signs, though. Unemployment was the highest in the country in May at 5.3%. The housing market is among the least affordable in the nation, without nearly enough homebuilding to change that. And while the surging tax revenues allowed Gov. Gavin Newsom to sign a balanced budget into law last month, there are real fears that it only postpones the inevitable cuts when things return to normal.
2026 Economy score: 295 out of 415 points (Top States grade: A)
Real GDP (2025): $3.38 trillion (+2.1%)
Debt Rating and outlook (Moody’s): Aa2, Stable
Share of state spending from federal funds: 33.8%
International goods trade (2025): $727.2 billion (17.1% of GDP)
Foreign direct investment (2024): $13.4 billion
Major corporate headquarters: Disney, Apple, Nvidia
2. Texas
VIPs from left, Executive Director, Texas Economic Development & Tourism Office Adriana Cruz, NVIDIA Founder and CEO Jensen Huang, Coherent CEO Jim Anderson, Sherman Mayor Shawn Teamann, and Director of the CHIPS Program Office with the Department of Commerce Bill Frauenhofer flip dirt in a trough during a ground breaking at Coherent’s advanced manufacturing facility in Sherman, Texas on June 16, 2026. Angela Piazza | The Dallas Morning News | Hearst Newspapers | Getty Images
Texas is an economic juggernaut year after year, a leader in economic growth and job growth. It is second only to Georgia in foreign direct investment in 2024, the most recent figures available from the Commerce Department. The state’s fiscal picture remains outstanding, with dozens of major corporations calling the Lone Star State home and new businesses popping up daily. But the Texas economy is not without some serious issues. The housing market is stagnating. Price appreciation has stalled, and foreclosures are rising. The state also remains particularly vulnerable to tariffs, based on figures prepared for CNBC by Trade Partnership Worldwide. International goods trade comprises nearly a third of the state’s nominal GDP, with the state particularly exposed to tariffs that were not invalidated by February’s Supreme Court ruling.
2026 Economy score: 302 out of 415 points (Top States grade: A)
Real GDP (2025): $2.27 trillion (+2.5%)
Debt Rating and outlook (Moody’s): Aaa, Stable
Share of state spending from federal funds: 35.9%
International goods trade: $850.2 billion (29.3% of GDP)
Foreign direct investment (2024): $22.1 billion
Major corporate headquarters: Oracle, Tesla, AT&T
1. North Carolina
Drone photo of downtown Raleigh, North Carolina.Spencer Hart | Istock | Getty Images
It says something about North Carolina‘s economy that it managed to turn in the nation’s best performance even as state lawmakers were unable to pass a budget for more than a year (under state law, the state continued to operate under the old budget while they hashed out a new one, which was finally passed by the legislature and signed into law by Gov. Josh Stein this week). It isn’t clear exactly what that says, but it says something. The Tar Heel State’s economic growth and job growth remained among the best in the country. Foreign direct investment was robust, as were new business formations. The budget battle took a bit of a toll on the state’s fiscal health, but not enough to raise concerns from credit rating agencies. North Carolina is relatively insulated from the impact of tariffs, but less so from potential federal budget cuts. Nearly 40% of state spending depends on funding from Washington, D.C., the 12th-highest percentage in the country.
2026 Economy score: 317 out of 415 points (Top States grade: A+)
Real GDP (2025): $682.4 billion (+2.7%)
Debt Rating and outlook (Moody’s): Aaa, Stable
Share of state spending from federal funds: 39.8%
International goods trade: $149 billion (16.7% of GDP)
Foreign direct investment (2024): $5.26 billion
Major corporate headquarters: Labcorp Holdings, Bank of America, Duke Energy
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