Virginia got some good news last week: It’s risen a notch in the annual CNBC ranking of “top states for business,” from No. 4 to No. 3.
The biggest surprise is who took first place: Ohio. This is the first time ever that a Rust Belt state has taken top honors. Is Ohio really the best state for business? Are we really third best?
All these measures are relative. If you’re looking to open a surfing business, Ohio probably isn’t your best choice. If you need to be near both Great Lakes shipping and the Ohio River, then yes. CNBC uses 138 metrics, changes them and their weighting every year, and doesn’t say specifically what they are. Does that make these rankings constantly relevant or just random guesswork? Whatever the answer is, the value of the CNBC ratings is perhaps largely symbolic — a strong talking point if your state does well, a rigged system that ignores your state’s assets if you don’t. Since Virginia has often been near the top — and has taken first-place honors more times than any other state (seven) — we have a vested interest in staying at or near the top.
Let’s try to find some objective measures that work equally for all 50 states and see how Virginia and Ohio (and 48 others) shake out. Spoiler alert: Ohio doesn’t come out so well on some of these, but Ohio’s not really our concern. The problem is that Virginia doesn’t come out so well, either. After Virginia’s leaders get through celebrating a No. 3 ranking, perhaps they ought to quietly consider some of these measures:
Virginia has the 48th worst job growth in the country
Comparing job growth seems the cleanest way to compare states. If the economy isn’t growing jobs, is it really a good economy? Now here’s the bad news:
Over the past year (from May 2025 to May 2026, the most recent month available from the Bureau of Labor Statistics), Virginia had the 48th worst job growth in the country. Nevada had the nation’s fastest job growth in that time at 1.92%. Nationally, job growth was 0.27%. But Virginia’s was -1.2%. Only Rhode Island and Oregon lost jobs at a faster rate.
If we look at just this year, from January through May, Virginia still ranks 48th. The only difference is that if we look just at this year, then Oregon and Maryland are the only two states losing jobs at a faster rate than Virginia.
Over the past year, Virginia has lost more jobs than any other state
From May 2025 to May 2026, Virginia lost 51,400 jobs. That’s more than any other state. Maryland had the second-largest job decline, at 31,200. If we look just at this year, then Maryland lost more jobs than Virginia. However we measure these job losses on the calendar, both states have the same reason: They’ve lost a lot of federal jobs — 20,110, or 39.1% of the total job loss, is from federal jobs. However, even if Virginia didn’t lose any federal jobs, it would still lead the nation in job losses, according to the Bureau of Labor Statistics. Virginia has actually lost more jobs (22,600 or 43.9% of the total) from professional, scientific and technical service jobs; a lot of federal contractors fit under that category. Virginia has lost jobs in most other categories, too. The main category showing job growth is in healthcare (up 1.57% in Virginia over that time, for a total increase of 9,690 jobs, not enough to offset the losses in other sectors). All that fits into a national picture:
The national economy is weakening
If we just look at job growth, which may not be the only economic measure but seems to be the best one, here’s what we see (these figures come from the Bureau of Labor Statistics):
Job growth is weakening nationally. We obviously need to discount the pandemic year of 2020 and some of the years following that, when job growth was abnormally high because the economy was bouncing back. However, once that settled out, we see job growth declining to its lowest levels since the Great Recession. There are multiple reasons for this. Sorting those out is not the goal today, but they include both policy decisions by the Trump administration (imposing or raising tariffs, reducing immigration, which has generally been an economic booster) and demographic reasons that any administration would have to grapple with (a growing number of retirees and fewer workers, the result of declining birth rates).
The point is that job growth is weakening. In 2024, every state had job growth. In 2025, 36 did, and 14 didn’t. So far this year, 27 have seen job growth while 23 have seen job losses. Those numbers are going in the wrong direction. That may have political consequences in this fall’s midterms, but it certainly will have economic consequences, regardless of the elections.
Virginia and Maryland may be unique in the impact that President Donald Trump’s federal cutbacks have had, but they’re also seeing the broader economy start to sink around them.
Virginia is losing manufacturing jobs at a faster rate than any other state
To be fair, manufacturing jobs are in decline almost everywhere and have been for some time. In 2024, they fell nationally by 0.59%. In 2025, the decline steepened to -1.22%. Through May, the loss of manufacturing jobs is on track to exceed that rate. If we want to look at these another way, manufacturing jobs in 2024 fell nationally in all but 12 states. Last year, they fell in all but three states.
Now, the bad news for Virginia. Last year, Virginia ranked last in the country, losing manufacturing jobs at a rate of 3.92%, more than any other state. Through May of this year, Virginia is still losing manufacturing jobs at a faster rate than anywhere else — a decline of 4.91%.
Politicians love to talk about manufacturing jobs — these are generally well-paying jobs that don’t require a college degree. However, manufacturing is in decline nationally. Manufacturing jobs declined in the last year of the Joe Biden administration and now are declining under Trump. There may be some political reasons as to why they declined under each president (inflation under Biden, tariffs under Trump), but the larger problem is that many manufacturing jobs are being automated or face other economic pressures that presidents find hard to reverse.
The more curious question is not why Virginia is losing manufacturing jobs, but why we’re losing them at a rate faster than other states. Some of that may simply be the types of manufacturing jobs we have — and what types other states are attracting. For instance, so far this year, Ohio is gaining manufacturing jobs while we’re losing them. Here in Virginia, Goodyear laid off 815 workers in Danville. Georgia-Pacific closed its plywood plant in Emporia, eliminating 550 jobs. The Yokohama tire plant in Salem closed, so more than 500 jobs gone there. Those are some mighty big hits. On the other side of the ledger, Virginia has also had some spectacular jobs announcements: the Microporous battery plant and the Avio rocket maker in Pittsylvania County, the Hitachi Energy expansion in South Boston, the AstraZeneca pharmaceutical plant in Albemarle County, Eli Lilly in Goochland County, an expansion of the Merck chemical plant in Rockingham County. However, the jobs leaving have left now, while the jobs coming aren’t here yet; some of those may be years away.
Now for the point that is inconvenient for data center critics: One part of Virginia’s manufacturing economy that is growing and is growing right now is related to the data center supply chain — power transformer jobs in Halifax County, heating and cooling equipment in Botetourt County. See my previous column on that. Every politician says they want to see a manufacturing renaissance. In one sector, we’re starting to see it, but now some want to slow down or shut down the industry that’s driving it.
We’re starting to see a separation between Virginia and North Carolina
In 2024, North Carolina ranked 13th for job growth, Virginia 14th.
In 2025, North Carolina ranked 10th, Virginia ranked 11th.
The two rival states were neck-and-neck.
Through May of this year, though, we see North Carolina jump to second place while Virginia has fallen to 48th.
There are many differences between the two states — tax rates, for instance — but the big one is that North Carolina isn’t home to the suburbs of the federal government, so those federal cutbacks haven’t hit the Tar Heel State the way they’ve hit the Old Dominion. Regardless of the reason, though, we are seeing a gap open up. That will have implications. It’s true that these days some jobs go where the people are, but it’s also true that some people will go where the jobs are.
None of this is new
As much as I’d like to flatter myself into thinking I’ve uncovered something here, I haven’t. Economists at the University of Virginia’s Weldon Cooper Center for Public Service have repeatedly warned in their quarterly forecasts that Virginia will lose jobs this year. Secretary of Finance Mark Sickles presented data similar to this to the Senate Finance Committee this spring. All I’ve done is to assemble publicly available data and put it on your plate for breakfast today. Sorry if it’s not very appetizing.
This is not about politics, but this is all about politics
Notice that the key job categories here have declined under both Democrats and Republicans. We can obviously point to Trump as the one who whacked the federal workforce, which has had a disproportionate impact on Virginia (and Maryland), and we can also blame him for tariffs injecting uncertainty into the economy. However, we can see other sectors of the economy weakening both before he took office and after. Trump may have made some things worse, but he didn’t create some of these underlying problems. Likewise, we can’t apportion blame in Virginia to either last year’s governor (Glenn Youngkin) or this year’s (Abigail Spanberger). They’re all dealing with larger forces than a simple executive order can solve.
However, that doesn’t mean Virginia’s political leaders can or should just continue on as if nothing is happening. Something is happening — or, perhaps, something isn’t happening. Virginia realized a long time ago that it has been over-reliant on the federal government; the GO Virginia economic development initiative was developed a decade ago as a way to grow the state’s private sector economy. Economies, like aircraft carriers, can take a long time to turn around (but sometimes a short time to sink). For the near term, is a General Assembly dominated by Democratic leaders from Northern Virginia paying sufficient attention to the state across our southern border — North Carolina — and what it will take to compete with a state that is cutting taxes? For the immediate future, though, it seems that Spanberger might need to be more of an economic development governor than she thought she’d have to be.
CNBC may be right that Virginia is one of the best states in which to do business, but the job growth stats suggest that not enough business is being done in Virginia right now.
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