North Carolina is America’s Top State for Business in 2025, led by a strong workforce and economy

“My priority, and I think the priority of Senate Republicans, will be to continue those policies that have provided that kind of environment that has made North Carolina attractive to private sector businesses,” state Senate President Phil Berger told The Carolina Journal in March. “Those sorts of things don’t happen by accident. That kind of growth doesn’t happen just by happenstance.”

North Carolina finished fourth in the Business Friendliness category of the CNBC study. Tort liability costs are the third-lowest in the country, according to the U.S. Chamber of Commerce Institute for Legal Reform. The state is in the top 10 for “economic freedom,” according to the Fraser Institute, a Vancouver-based libertarian think tank, which gave the state high marks for its approaches toward government spending and labor regulation.

As North Carolina legislators battle over the state’s budget and tax policy, Stein told CNBC he has no intention of raising taxes.

“No one likes to pay taxes, so we want taxes to be as low as possible,” he said. But he also noted that the state already has the lowest corporate income tax of any that levies one, and what Stein said he does not want is to “imprudently continue to go to zero when we have all this fiscal uncertainty coming from Washington.”

With the expectation of greater state spending on health care and food assistance, given the changes being made to federal support for Medicaid and SNAP program benefits in Trump’s tax and spending bill, Stein said his message to state legislators is: “Let’s go slow and make sure we have the fiscal situation we need to succeed well into the future.”

While North Carolina is almost unfailingly friendly to business, it is not terribly friendly to workers. The state comes in at No. 29 for Quality of Life — its worst category in the CNBC study this year. Oxfam International, a left-leaning anti-poverty organization, ranks North Carolina dead last in its annual report on The Best and Worst States to Work in the U.S., citing an almost complete lack of worker protections. Also, North Carolina is one of only five states with no law protecting nondisabled people from discrimination in public accommodations, according to the National Conference of State Legislatures.

Hurricane damages, Medicaid cuts could hurt business climate

North Carolina’s biggest headwinds, however, come from areas that are much harder for a state to control.

The state is still in the early stages of recovery from Hurricane Helene, which killed 100 people and destroyed thousands of homes in North Carolina alone, causing nearly $60 billion in damages in the state. The storm, and subsequent flooding, struck in September, which means that much of the economic impact may not be reflected in this year’s Top States data. The state has appropriated upward of $2 billion in recovery funds, which could accelerate if the Trump administration follows through on plans to phase out FEMA. North Carolina is also among the top recipients of research grants from the National Institutes of Health and the National Science Foundation, which are now on the chopping block.

Stein said that as a bigger state than most, North Carolina has a sophisticated emergency response system, but he says it is critical for the federal government to maintain its primary role in disaster management. “We don’t get a huge storm every year, but the country does. It doesn’t make sense for every state to have a fully staffed emergency response team,” he said.

The cost of disaster response is also too high for any state alone to bear, Stein said, speaking of the $60 billion in recent damages seen across in North Carolina from storms like Hurricane Helene. “Only the federal government can do that,” he said, noting North Carolina has an $11.5 billion request before Congress and the administration. “I eagerly hope they fund it soon,” he said.

Other Trump policies could also hurt the state. Sen. Thom Tillis, who announced June 29 that he would not seek reelection after opposing the president’s signature tax-and-spending bill, warned that Medicaid cuts could cost the state as much as $32 billion and cause more than 600,000 North Carolinians to lose their health insurance.

“It’s a real concern. This bill will result in real harm to North Carolina, harm to people and health care,” Stein said. “You cannot do that and not have human suffering. We have a lot of rural hospitals and those are where uninsured people will predominantly live and [those hospitals] will be the ones at risk of closing. We are very concerned,” Stein added.

He pointed to the bipartisan success achieved in North Carolina two years ago when the state expanded Medicaid coverage to 660,000 people. “Now we have to come together to defend Medicaid,” Stein said.

And that’s not all. More than 20% of North Carolina’s GDP in 2024 came from international trade in goods, according to data supplied for the CNBC study by Trade Partnership Worldwide. That leaves the state vulnerable to the impact of higher tariffs, which Stein told CNBC can already be seen in a recent reduction in traffic at the state’s biggest port in Wilmington resulting from a trade policy that “changes practically on a daily basis.”

“We need to have stability, businesses need certainty, so they can figure out how and where to invest,” Stein said.

But at least North Carolina steers into those headwinds from a strong position.

Scoring all 50 U.S. states

The CNBC study measures all 50 states across 10 categories of competitiveness, for a total of 2,500 possible points. North Carolina racks up 1,614 points to capture this year’s crown.

Our methodology assigns a weight to each category based on how frequently states cite it as a selling point. The idea is to measure the states based on the criteria they use to pitch themselves to businesses.

Here are this year’s categories and point totals:

• Economy: 445 points (17.8%)
• Infrastructure: 405 points (16.2%)
• Workforce: 335 points (13.4%)
• Cost of Doing Business: 295 points (11.8%)
• Business Friendliness: 270 points (10.8%)
• Quality of Life: 265 points (10.6%)
• Technology & Innovation: 255 points (10.2%)
• Education: 110 points (4.4%)
• Access to Capital: 60 points (2.4%)
• Cost of Living: 60 points (2.4%)

Copyright: Charlotte Regional Business Alliance from CNBC