Virginia falls to No. 4 among CNBC’s top states for business

Virginia lost its spot at the top of CNBC’s annual Top States for Business report, the cable business network announced Thursday. The commonwealth, which has been ranked No. 1 six times, an all-time record, fell to No. 4 this year.

North Carolina, which has won three times out of the past four years, took the coveted No. 1 ranking for 2025, with Texas coming in a close second. Florida ranked third in CNBC’s 19th annual business study.

The last time Virginia ranked this low on the study was 2018, when it also was No. 4.

Acknowledging that Virginia remained “a business powerhouse,” CNBC ranked the commonwealth first in the nation for education and it rose to second for infrastructure. But, the network said Thursday, “all that business might is no match for the mighty budget cuts coming from across the Potomac, not to mention the tariffs.” As a result, Virginia fell to 14th for overall economy, down from No. 11 in 2024.

CNBC continued to cite the disproportionate impact of the second Trump administration‘s deep budget cuts and dismantling of federal agencies in explaining why Virginia lost its No. 1 ranking this year. As of last year, Virginia had about 144,000 federal workers and more than 150,000 more working for federal contractors, the business news network noted.

The state’s unemployment rate of 3.4% remains below the national average, but the University of Virginia’s Weldon Cooper Center for Public Service forecast that the state could lose up to 32,000 jobs this year and see an unemployment rate of about 3.9% later in the year. In 2026, that average could be 4.6%, the center said in May.

Gov. Glenn Youngkin, however, has touted the state’s continued job creation, and in February, he announced the creation of “Virginia Has Jobs,” an online portal to assist federal workers and other Virginians in finding new jobs. He said that he had “extraordinary empathy” for federal employees who found themselves suddenly out of work, but praised the Trump administration for “rooting out waste, fraud and abuse.”

Youngkin added at the time that the state had 250,000 open jobs across various industries, including manufacturing, health care, space, education and law enforcement, although some critics have said that these jobs come with lower pay than federal workforce positions. In the state’s budget amendments, Youngkin cut $900 million in spending to maintain a financial cushion in case of repercussions related to federal spending cuts and tariffs.

In a statement Thursday, Youngkin said that “CNBC’s new methodology this year is thrown off by a new subjective metric that mistakenly ascribes substantial risk to Virginia from the federal government’s presence in the Commonwealth. CNBC fails to recognize that our private sector growth has been at record levels, with $121 billion in business investment committed and record job growth, with 270,000 more Virginians working and roughly 200,000 open and unfilled jobs.”

The governor also pointed out that the state’s AAA bond rating was reaffirmed this year, and more federal funding has gone toward defense and national security projects, which are well represented in Virginia. “By the objective metrics, Virginia is still the best state to start or grow your business,” Youngkin said. “The facts are clear: Nearly 350,000 jobs created or in the pipeline, more than $121 billion in capital investment from companies expanding in Virginia or moving to the commonwealth, 15,000 high-growth startups, and more people moving to Virginia than away from the other 49 states for the first time in a decade.”

For the Top States study, CNBC ranks states on 10 categories, ranging from education to infrastructure to economy, with 135 metrics, worth a total of 2,500 points. North Carolina received 1,614 points this year, and Virginia received 1,578, while No. 2 Texas had 1,600 points and No. 3 Florida had 1,588.

Virginia’s category rankings in the 2025 CNBC Top States for Business were as follows:

• • First place — Education

• • Second — Infrastructure

• • Seventh — Business friendliness

• • Eighth — Quality of life; Technology and innovation

• • 10th — Access to capital

• • 14th — Workforce; Economy

• • 21st — Cost of living

• • 31st — Cost of doing business

Each year, CNBC weighs categories differently based on the focuses of states’ economic development marketing pitches.

“In 2025, amid recession fears, more states than ever are touting their economic strengths,” CNBC said. “That makes economy this year’s most important category.”

Under the economy category, CNBC assessed GDP growth and job growth over the past year, as well as the residential real estate market, and new in 2025 was a measure of states’ tariff risks and survival rates of new businesses.

Last year, infrastructure was a major factor in Virginia’s win, with the state receiving kudos for the number of shovel-ready sites for industrial growth.

North Carolina has often sparred with Virginia for the top spot, having won CNBC’s rankings in 2022 and 2023, and No. 2 in 2021 and 2024, when Virginia landed on top.

The Virginia Economic Development Partnership released a statement Thursday noting the change in weighting of categories this year.

“It’s important to remember that Virginia is in a tight race each year with competitor states for economic development in general and for this ranking in particular,” the state economic development organization said. “In 2024, Virginia bested No. 2 North Carolina by only three points out of 2,500, so subtle changes in CNBC’s methodology or in Virginia’s relative performance can materially impact this ranking.” Virginia maintained its top ranking in education and improved from No. 3 to No. 2 in infrastructure, VEDP noted. 

U.S. Sen. Tim Kaine, who was governor when Virginia won its first CNBC ranking in 2007, released a statement that was critical of “the chaos and uncertainty caused by President Trump’s tariffs, the slashing of federal funding, and the politicizing and hollowing out of the federal workforce [that] are gut punches to Virginia’s economy. While I’m glad to see Virginia ranked first in the education category, I worry we won’t hang on to it for long if Trump keeps meddling in our universities. I will continue to do everything I can to protect Virginia’s economy and schools from this disastrous administration.”

Abigail Spanberger, the Democratic nominee for Virginia governor, said that the rankings “make clear that Virginia needs a governor who will build a more resilient economy, leverage our commonwealth’s strengths to attract new investment, prepare our workforce for 21st-century jobs, and stand up for our workers and small businesses in the face of ongoing threats.”

She attributed the drop in ranking to federal job cuts under President Donald Trump, and zinged Lt. Gov. Winsome Earle-Sears, her Republican opponent: “Unlike my opponent in this race, I won’t dismiss threats to our workforce, our economy and Virginia’s reputation.”

Earle-Sears did not immediately release a statement about the CNBC rankings. She has received criticism from Democrats over a recording released in late March in which Earle-Sears is heard downplaying federal job losses, saying that layoffs are common and that “the media is making it out to be this huge, huge thing.”