Our economy continues to outpace the national trend because we budget on sound principles and maintain a business-friendly environment. —Gov. Gary Herbert
SALT LAKE CITY — For the third straight year, a business publication has awarded the Beehive State top honors as a place to do business in the U.S.
Forbes Magazine announced Wednesday that Utah headed its 2012 list of the Best States for Business for the third year in a row. Citing Utah’s stable economy and pro-business policies, the state was able to retain the nationwide top spot.
The report stated that the state’s economy has expanded 2.3 percent annually since 2006 — fifth best in the country — compared to 0.5 percent for the rest of the nation.
“We have a very fertile environment for entrepreneurs and business,” Gov. Gary Herbert said. “Our economy continues to outpace the national trend because we budget on sound principles and maintain a business-friendly environment.”
Herbert cited three areas where Utah has developed a competitive advantage over other states: taxes, labor force and a favorable regulatory climate. Utah has a 5 percent flat corporate tax rate — one of the lowest in the country.
Utah also has a young, vibrant workforce, the report said, with a median age of 29 years old — four years less than the next youngest state, Texas. A third of the state’s workforce is bilingual, according to the Economic Development Corporation of Utah, largely a result of the state’s large population of Mormons, many of whom spend time as missionaries overseas, the report said.
It is an attractive benefit for companies in an increasingly global economy and has helped lure large U.S. companies with international operations like eBay, Oracle and Procter & Gamble, Forbes said. The report noted that investment bank Goldman Sachs’ Salt Lake City office was its second largest in the Americas with more than 1,400 employees.
Utah ranks third for regulatory climate in the Mercatus Center’s Freedom in the 50 States study — a new metric in the Best States study.
“Utah is less likely to reward frivolous lawsuits or hand out excessive judgments,” said report co-author Jason Sorens. “Utah’s health insurance regulations are generally light, resulting in less costly policies and more choice for people in the small group and individual markets.”
Last year, the state eliminated or modified 368 administrative regulations characterized as “a drag on the economy” by Herbert.
Among the other positive attributes, Utah’s energy costs are 29 percent below the national average and it was also one of seven states to maintain an AAA bond rating from the three major rating agencies.
Forbes’ rankings are based on six factors for businesses, including costs, labor supply, regulatory environment, current economic climate, growth prospects and quality of life.
Virginia, North Dakota, North Carolina, Colorado rounded out the top five respectively in the Forbes report. All five states were among the top five last year as well, although not necessarily in the same order.