The U.S. economic recovery has been an uneven one. Overall, the recent numbers look great. The Bureau of Labor Statistics announced U.S. employers added 288,000 jobs in June. The unemployment rate fell to 6.1%, the lowest it has been since the financial crisis peaked in the fall of 2008. A total of 1.4 million jobs were added in the past six months, which marks the best showing since 2006. The stock market has continued its meteoric rise, with the Dow Jones topping 17,000 for the first time on the news.
But the news is not great everywhere. Unemployment remains stubbornly high in some areas, with a dozen metro areas still mired in double-digit unemployment -- dozens more if you include the underemployed. Income growth has been almost nonexistent over the past five years, with more than half of the metropolitan areas in the U.S. showing negative real income growth.
Forbes crunched the numbers on every metro area to figure who has the best and worst business climates. The result is our 16th annual look at the Best Places for Business and Careers.
Raleigh, N.C., ranks first this year, moving up from third in 2013. The North Carolina capital previously ranked first in 2011 and had a three-year run in the top spot from 2007 to 2009. It is the only East Coast city that made the top 10.
Fueling Raleigh’s consistent results are business costs that are 18% below the national average, and an adult population where 42% have a college degree, the 12th best rate in the U.S. (30% is the national average). Raleigh is home to North Carolina State University and nearby schools include Duke University and the University of North Carolina at Chapel Hill. The area’s appeal has led to a strong inflow of new residents to the city, which boasts the sixth fastest net migration rate over the past five years.
Research Triangle Park continues to fuel significant development in the area. The park is located at the core of the Raleigh-Durham-Cary Combined Statistical Area, and it is the largest research park in the country. It features roughly 170 companies that employ 39,000 full-time, mostly high-tech workers. There have been 1,800 start-up companies created at RTP since 1970.
Networking giant Cisco Systems announced plans last month to add 550 jobs in RTP by the end of 2017, in addition to the 4,600 already in the area. “By expanding our presence and hiring the best talent, we will continue developing technology solutions that will enable the Internet of Everything and fuel innovation here in RTP," said Cisco President Gary Moore in a statement announcing the news. Other top employers in the park include IBM, GlaxoSmithKline, Fidelity Investments, Biogen Idec, Credit Suisse and BASF.
Raleigh also prospers from small businesses facing low regulatory hurdles compared to other cities. Projected annual job growth for the Raleigh area is 3.7% through 2016, which ranks seventh best among the 200 biggest metro areas (see “Naples, Austin Head List Of Best Cities For Job Growth”).
Last year’s top-ranked city, Des Moines, drops back to second. The Iowa capital is a financial services hub with major employers including Marsh, Nationwide, Principal Financial and Wells Fargo. High tech firms have also been making their way to the heartland to take advantage of Iowa’s low energy costs. Microsoft announced plans in April to invest $1.1 billion in a new data center, which brings the company’s total investment in West Des Moines to nearly $2 billion. Facebook has four data centers in the area.
Des Moines employers and employees can take advantage of business costs 17% below the U.S. average and living costs that are 6% lower than the national average. The city’s $38 billion economy is projected to grow at a robust 4% annual rate over the next three years, according to Moody’s Analytics.
Provo, Utah, ranks third overall this year and leads a trio of Utah places near the top with Salt Lake City at No. 8 and Ogden ranked No. 11. Brigham Young University brings a stabilizing presence to the $19 billion Provo economy. Job growth for Provo was tops in the country last year, and it ranks seventh best over the past five years. Global multilevel marketing firm Nu Skin Enterprises, which is based in Provo, opened a new $100 million headquarters in the city in October.
Rounding out the top five are a pair of Colorado metro areas: Denver and Fort Collins. Both feature highly educated workforces and strong net migration patterns. Denver’s business and living costs are higher than any other city in the top five, but its diverse economy and significant outdoor recreational options continue to attract educated, young professionals. Many high-tech companies including Hewlett-Packard, Intel and AMD have relocated operations to Fort Collins in part to take advantage of the resources of Colorado State University and its research facilities. Fort Collins has the highest level of high school attainment (95% of the adult population) and ranks ninth best for college attainment at 45%.
To gauge the best places for business in the U.S., we rate the 200 largest metro areas on a dozen factors related to jobs, costs (business and living), income growth, quality of life and education of the labor force. Forbes uses data from economic research firm Moody’s Analytics, the U.S. Census and demographer Bert Sperling, who runs Sperling’s BestPlaces (click here for a more detailed methodology).
Atlantic City brings up the rear for the second straight year, ranking No. 200 (see “Atlantic City Heads Worst Cities For Business And Careers”). The New Jersey gambling and convention destination was hammered by the economic downturn and increasing gambling options in surrounding states. AC gaming revenues are down 45% since their 2006 peak. Potentially four of the city’s 12 casinos will close in 2014. There has been a steady net migration out of the area since 2007 and it is expected to continue through at least 2016.
Top 10 best places for business 2014:
#1 Raleigh, N.C.
Metro population: 1,233,700
Gross Metro Product: $61 billion
Projected annual GMP growth: 3.8%
Business costs are 18% below the national average, and 42% of the adult population has a college degree, the 12th best rate in the U.S. (30% is the national average).
#2 Des Moines, Iowa
Metro population: 594,900
Gross Metro Product: $38 billion
Projected annual GMP growth: 4.0%
Microsoft announced plans in April to invest $1.1 billion in a new data center, which brings the company’s total investment in West Des Moines to nearly $2 billion. Facebook has four data centers in the area.
#3 Provo, Utah
Metro population: 567,000
Gross Metro Product: $19 billion
Projected annual GMP growth: 2.9%
Job growth for Provo was tops in the country last year at 5.3%, and it ranks seventh best over the past five years. The unemployment rate is a microscopic 3.2%.
#4 Denver, Colo.
Metro population: 2,687,300
Gross Metro Product: $157 billion
Projected annual GMP growth: 3.5%
Denver's diverse economy and significant outdoor recreational options continue to attract educated, young professionals. Net migration into the Denver area has been among the strongest in the U.S. over the past five years.
#5 Fort Collins, Colo.
Metro population: 317,500
Gross Metro Product: $15 billion
Projected annual GMP growth: 4.3%
Many high-tech companies including Hewlett Packard, Intel and AMD have relocated operations to Fort Collins to take advantage of the resources of Colorado State University and its research facilities.
#6 Lincoln, Neb.
Metro population: 313,900
Gross Metro Product: $17 billion
Projected annual GMP growth: 3.0%
Business costs are 20% below the national average in Nebraska's capital. The 3.1% unemployment rate is the lowest of the 200 largest metro areas.
#7 Oklahoma City, Okla.
Metro population: 1,313,200
Gross Metro Product: $61 billion
Projected annual GMP growth: 3.2%
The energy market has helped Oklahoma City have one of the best job and income growth rates over the past five years.
#8 Salt Lake City, Utah
Metro population: 1,181,300
Gross Metro Product: $74 billion
Projected annual GMP growth: 3.9%
Salt Lake City is undergoing an eight-year, $1.8 billion makeover of its airport that is expected to pump $3.3 billion into the state's economy.
#9 Seattle, Wash.
Metro population: 2,779,000
Gross Metro Product: $212 billion
Projected annual GMP growth: 3.1%
The Seattle metro area is home to some of the most iconic names in business including Amazon.com, Costco, Microsoft, Nordstrom and Starbucks.
#10 Nashville, Tenn.
Metro population: 1,670,200
Gross Metro Product: $87 billion
Projected annual GMP growth: 3.4%
Job growth in the Music City has average 1.2% over the last five years, which ranks fifth among the 200 largest metro areas.
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