While CEOs have their perennial favorite—and least favorite—states for business, competition among those in the middle tier is intensifying, leading to notable shake-ups in the latest rankings.
That’s according to Chief Executive magazine’s annual Best and Worst States for Business list, published in the Spring 2025 issue. Based on a nationwide survey of more than 650 CEOs and business owners, the ranking reflects executives’ perceptions of how business-friendly each state is compared to others.
Texas and Florida once again top the list, with Texas retaining its long-held No. 1 position. “Both Texas and Florida are growing states, in people and infrastructure,” said one CEO respondent. “I think the policies there invite business and make it easy to do business.”
Illinois, New York and California maintain their position as the bottom three states. Despite their economic scale and cultural capital, CEOs continue to cite high taxes, regulatory burdens and rising costs of living as major obstacles.
But beyond those mainstays, the 2025 rankings reveal a broader shift taking place across corporate America. Increasingly untethered from traditional urban economic hubs, companies are migrating toward states offering a powerful trifecta: business-friendly environments, skilled workforces and a more affordable, higher quality of life.
States that have found this secret sauce are steadily climbing the ranks. Georgia and Utah each rose two spots, landing at No. 5 and No. 7, respectively. Virginia climbed three spots to break into the top 10 for the first time, its success at least partly owed to an intentional, broader geographic approach to high-tech growth beyond the already-bustling northern corridor near Washington D.C.
Meanwhile, North Carolina inched up to No. 4, and Tennessee (No. 3), Indiana (No. 6), and Nevada (No. 8) held steady in the top 10. Arizona, however, slipped six spots to No. 10, a dip attributed to the strain that rapid growth has placed on its infrastructure and a political landscape that may be seen as less predictable.
Competition between states is fueled by a wave of CEO restlessness: According to the survey, 54 percent of executives said they were open to exploring new locations, up from 49 percent last year. Forty-two percent said they were considering opening or expanding operations in a new state, and an equal percentage are contemplating a full headquarters relocation.
The stakes are high. With global trade in flux, federal policy shifting under a new administration and emerging technologies like AI redefining entire sectors, states are under pressure to adapt. Many are responding with policy reform, talent development and strategic investment in key industries.
Last year, tax policy topped the list of CEO concerns. But in 2025, access to talent ranked No. 1, with more than 75 percent of respondents citing it as their most pressing issue.
“There are cost-related factors CEOs should and do contemplate, but if you don’t have the workforce you need, it’s more irrelevant what the rest of [the offer] is,” says Mark Schweitzer, former senior leader at the Federal Reserve Bank of Cleveland and an economics professor at Case Western University.
States like Georgia, Virginia, Indiana and Ohio are seeing gains due to aggressive workforce training initiatives and university partnerships that align with high-growth industries such as biotech, logistics and advanced manufacturing.
One standout in this year’s report is Wisconsin, which rose nine spots to No. 21. The state recorded $2.4 billion in capital investments in fiscal year 2024, the most since the Wisconsin Economic Development Corporation (WEDC) was formed. Additionally, Eli Lilly’s $3 billion expansion of its Kenosha County manufacturing facility positions the state to capitalize on the booming GLP-1 pharmaceutical market.
“We’ve been making smart, strategic investments in our infrastructure, our schools, our communities and our workforce, and those efforts are paying off,” said Governor Tony Evers. “Businesses want to expand or move to Wisconsin because they know we’ve got the hardworking people, innovative spirit and strong institutions to ensure they succeed here.”
Not all states are riding the wave. Delaware, long considered a safe haven for corporate incorporation, fell 10 places to No. 25. Once prized for its low taxes and the highly regarded Court of Chancery, Delaware’s recent tax increases and litigation policy changes appear to be eroding its traditional advantages.
As businesses continue to adapt to a rapidly changing economic landscape, states must remain agile and forward-looking. In today’s competitive environment, winning over CEOs is no longer about offering the biggest incentive—it’s about delivering the clearest vision for sustainable success.
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