Forbes ranks NC 2nd in list of ‘Best States for Business’ despite HB2 backlash

The blowback that erupted after House Bill 2 was signed into law this year didn’t hurt North Carolina’s ranking in Forbes’ annual list of the “Best States for Business.”

For the second consecutive year, North Carolina ranked second on the list behind Utah, which topped the list for the third consecutive year.

One key for North Carolina’s high ranking was in the area of business costs, where the state ranked second in the nation.

“North Carolina has the second smallest union workforce in the U.S. in terms of percent of total employment” behind South Carolina, Forbes noted. “The resulting benefit is labor costs that are 11 percent below the national average – fourth lowest in the country.”

Forbes, which previously estimated that HB2 cost the state $630 million worth of economic activity, noted in releasing the list Wednesday that North Carolina snared the No. 2 spot “despite the backlash from HB2.”

HB2 regulates the use of public bathrooms and forbids local governments from enacting measures that protect LGBT people, prompting critics to contend the law discriminates against the LGBT community. As a result, PayPal and Deutsche Bank halted their expansion plans, entertainers such as Bruce Springsteen and Pearl Jam canceled concerts, the NBA pulled its All-Star Game out of Charlotte and the NCAA and ACC canceled sporting events.

The law prompted North Carolina’s ranking in the regulatory environment category to drop from No. 4 to No. 7, but that didn’t affect its overall ranking.

Forbes also cited the $2.7 billion in foreign direct investment that the state attracted last year, which it said “has fueled much of North Carolina’s high-tech job growth,” and noted that “people have been flocking to North Carolina for the past decade.”

Forbes considers six categories in compiling its list. In addition to regulatory environment and business costs, here’s how North Carolina ranked in the other categories: No. 12 in labor supply; No. 22 in economic climate; No. 9 in growth prospects; and No. 13 in quality of life.

North Carolina is the only state that has ranked among the top five overall in each of the 11 annual lists compiled by Forbes.

This story was originally published November 16, 2016 at 11:51 AM with the headline "Forbes ranks NC 2nd in list of ‘Best States for Business’ despite HB2 backlash."