A bustling urban scene in Rhode Island reflecting the state's economic environment.
Rhode Island has fallen to 46th place in CNBC’s annual business rankings for 2025, a drop from 44th in 2024. This decline highlights the state’s troubled business environment, with concerns over infrastructure, business friendliness, and economic challenges like high inflation and labor shortages. Despite some improvements in areas like education and quality of life, critics emphasize a lack of decisive action from policymakers. Moving forward, state officials seek to enhance competitiveness through economic development measures.
Rhode Island has been ranked 46th out of all states in CNBC’s “America’s Top States for Business 2025,” a significant drop from its previous position of 44th in 2024. This ranking not only reflects a decline in Rhode Island’s competitive standing but also places it as the lowest-ranked state in New England.
The CNBC analysis evaluates states using 135 metrics across 10 broad categories of competitiveness, which include critical factors such as the economy, infrastructure, workforce, and cost of living. Rhode Island’s decline has been consistent, with prior rankings at 45th in both 2022 and 2023, signaling a troubled trend in the state’s business environment.
Despite the overall drop in ranking, Governor Dan McKee emphasized that there are notable improvements in specific areas, particularly in quality of life and education. The state’s education ranking rose from 43rd to 33rd, thanks in part to initiatives like Learn365RI, which focuses on enhancing educational outcomes.
In addition to education, Rhode Island saw improvements in several areas, including workforce, access to capital, cost of living, education, and quality of life. However, challenges remain substantial. Rhode Island continues to rank near the bottom in terms of business friendliness, infrastructure, and the overall cost of doing business.
Further complicating the business landscape, Rhode Island is experiencing high inflation and labor shortages. These factors hinder the potential for business startups, with a separate analysis from WalletHub identifying Rhode Island as the 50th state for startup success. In comparison, neighboring Massachusetts ranked significantly higher in this category at 33rd, emphasizing a disparity in the regional business climate.
Looking ahead, politicians in Rhode Island argue that ongoing economic development measures, such as the elimination of certain state taxes, are steps towards improving the business environment. However, the state’s ranking in CNBC’s report reveals the steep challenges it faces as it seeks to enhance its competitiveness for businesses and attract new ventures.
As Rhode Island grapples with these economic hurdles, state officials and businesses will need to collaborate closely to foster an environment conducive to growth and prosperity. The developments in the state’s rankings are a call to action for lawmakers to address the issues affecting business development and overall economic health.
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