It’s a step up from the state’s No. 2 ranking last year and reflects Virginia’s top-rated public education system and push to create sites that are prepared for businesses to move into, CNBC said.

Virginia led the four Southern states that Gov. Glenn Youngkin regularly cites as top competitors in wooing new businesses and business expansions, beating North Carolina in what CNBC said was the smallest-ever gap in scores on some 128 measures.

Youngkin said in a statement: “Economic development is a team sport, and Virginia’s made giant strides in business-ready sites, workforce development, regulatory reduction, infrastructure investment and all-of-the-above power solutions.”

He said Virginia has seen record job growth as businesses committed to invest more than $74 billion in new and expanded operations here.

Those investments include Lego Group’s first U.S. plant as well as new facilities for Amazon Web Services, Raytheon and Boeing and major expansions by Hilton, Northrop Grumman and Framatome.

“When a business chooses to invest and grow in Virginia, we’re promising best-in-class talent, infrastructure, power solutions and business-friendly environment,” Youngkin said.

Youngkin, citing factors that have boosted competitive position, cited some $5 billion in tax relief to Virginians over the past two years, along with consolidating the state’s workforce development efforts, his energy plan with its emphasis on using natural gas and small nuclear reactors along with the push to expand wind and solar generation, and multi-million-dollar spending on preparing land for business uses.

While campaigning for election in 2021, Youngkin said Democrats had driven the state economy into the ditch, downplaying Virginia’s No. 1 ranking in 2019 and 2021, while Democrat Ralph Northam was governor. CNBC had no ranking in 2020 because of the COVID-19 pandemic.

Virginia ranked third in 2022, Youngkin’s first year in office and second last year.

CNBC said a bipartisan effort on education was a key factor.

“Virginia’s biggest competitive strength is its education system, ranked No. 1 in the nation,” CNBC said.

The network noted that when Democrats regained control of the General Assembly in 2023, “they pushed back on what they said were cuts in education funding in Youngkin’s budget,” with both sides eventually agreeing on a compromise that includes $2.5 billion in new funding for K-12 schools, and 3% pay raises for teachers and state workers.

It cited the state’s expansive higher education options, especially noting Virginia’s five historically Black colleges and a 28% increase in state support for higher education over the past five years.

In addition, CNBC said Virginia offers some of the most individualized K-12 instruction in the nation, with an average of 10.9 students per teacher last year.

“That appears to be translating to solid test scores,” CNBC said.

Infrastructure, a new category, was also important, CNBC said. Virginia ranked third in the nation here.

“Where Virginia’s infrastructure really shines is in the wealth of shovel-ready sites the state offers for companies that want to build fast. The state’s economic development arm has certified dozens of sites across the Commonwealth, promising that all utilities and infrastructure can be in place within 18 months,” the CNBC summary of results noted.

CNBC cited comments from the Site Selectors Guild that called Virginia’s program is one of the most advanced and well-funded in the nation.

In other categories Virginia ranked fifth for business friendliness, eighth for access to capital, ninth in workforce measures, 11th for its economic situation, 15th for technology, 19th for both cost of living and quality of life and 24th for the cost of doing business,

The state’s biggest improvement in rankings came with the cost of doing business, up 10 places from 34th in 2023. The biggest slide in rankings was for access to capital, down four slots from fourth in 2023.

Other significant ranking increases came in cost of living, up six places, and the economy, up two places. The state’s ranking for quality of life declined by three places and workforce by two.

“Virginia’s ranking as the Top State for Business reaffirms our conviction that Virginia is the premier state for business,” said Barry DuVal, president of the Virginia Chamber of Commerce.

“It highlights our strong education system, availability of business-ready sites, and Virginia’s commitment to economic development and a culture of innovation and entrepreneurship.”

Rivals North Carolina, Texas, Georgia and Florida filled out the rest of the top five rankings. Minnesota was the top ranked northern state, at sixth. CNBC rated Hawaii the worst state for business.