News Summary

Michigan has climbed to 6th place in CNBC’s best states for business ranking for 2025, marking its highest position since the ranking began. This improvement reflects a positive trend in the state’s economic climate, driven by strengths in international trade and robust job creation efforts. Despite concerns regarding economic growth and a sluggish housing market, Michigan’s leaders remain optimistic about future prospects. The state’s Governor credits this progress to initiatives aimed at enhancing the manufacturing sector and reducing job training costs.

Lansing, Michigan – Michigan has achieved a significant milestone by climbing to 6th place in CNBC’s annual ranking of the best states for business for 2025, marking the highest position since the ranking began 19 years ago. This improvement comes after a ranking of 9th in 2024, 10th in 2023, and 16th in 2022, showcasing a positive trend in the state’s business climate.

North Carolina topped the list as the best state for business in 2025, followed by Texas, Florida, Virginia, and Ohio in the subsequent four spots. CNBC’s ranking evaluates states based on 10 different categories, including infrastructure, workforce, and education, with a notable emphasis on the economy in this year’s assessment due to inflation concerns and rising costs of living and conducting business.

Michigan’s strength in international trade, along with its resilient economy, played a crucial role in the state’s ascendance in the rankings. The newly introduced metrics this year examined risks related to trade wars and potential federal budget cuts, especially concerning research grants. Approximately 42% of Michigan’s GDP comes from international goods trade, where less than 5% of that trade is linked to China, thus offering some protection against potential tariffs.

In the specific category of economy, Michigan saw a significant advancement, finishing at 18th, a remarkable jump from 38th place just one year prior. The risks associated with tariffs and federal budget cuts contributed to the state’s stronger position, alongside metrics that examined small business survival rates.

Michigan’s leaders expressed optimism regarding the improvement in business conditions, viewing the rank as a validation of the state’s economic evolution. The state’s Governor attributed this success to concerted efforts in job creation, enhancements in the manufacturing sector, and reductions in job training costs undertaken by her administration.

Despite the positive ranking, key challenges remain. Concerns linger over weak economic growth paired with a sluggish housing market, which could impact future prospects for Michigan’s business environment. A recent survey indicated that a considerable 87% of Michigan executives believe an economic downturn is on the horizon within the next six months, a sharp increase from the 20% recorded the previous year.

Economists from the University of Michigan have projected modest economic growth for Michigan moving forward, faced with broader national economic issues and heightened uncertainty concerning policy direction. As of May 2025, Michigan’s unemployment rate stood at 5.4%, surpassing the national average of 4.2%, further highlighting the economic challenges that could temper the state’s overall progress.

This year’s rankings and the data point to a complex economic landscape for Michigan, characterized by an upward trend in business rankings but coupled with underlying pressures and pessimistic forecasts from the business community. As the state navigates these dynamics, the implications for long-term growth and stability will remain closely monitored by economic analysts and businesses alike.