Last year’s set of state rankings puts Arizona in high esteem, but not moving up much.

We at Commercial Real Estate Group of Tucson keep up with business-media state rankings related to Arizona and Tucson commercial real estate.

We know that these are important bits of information that site selectors look for as they consider Arizona and Tucson office space, retail space and industrial space.

Bottom Line

Arizona’s business friendliness hovers around the top half of states in these lists, showing that the state is worth taking a look at. It’s a pretty good position to be in after years of clawing back from the bottom half of rankings following the Great Recession of 2009.

We’ve seen a lot of hard work by economic developers in our state to make Arizona more attractive to businesses looking to open, expand or relocate operations. But right now those efforts are reflected in the rankings as holding steady.

That could mean one of two things. Either

• Arizona is holding its own as many states’ economies and economic development efforts improve
• Arizona is merely holding on as some states surge in their business recruitment efforts.

We hope it’s the first scenario, knowing that competition is always fierce for getting good job-producing companies. Filling in gaps in what’s important to site selectors can move us generally into the top 10.

Why should you care? New Arizona businesses provide additional demand for service and retail sectors in our economy. That provides more jobs and business success. And those are benefits we all can endorse.

Here are highlights of the rankings we follow.

Chief Executive Magazine

This survey of CEOs has kept Arizona in the top 10 for several years now. The state sat in the sixth spot in the “2016 Best & Worst States for Business” rankings and number two in the Southwest profile that includes Texas (1), Oklahoma (3), Arkansas (4) and New Mexico (5).

The magazine cited as Arizona’s advantages

• a corporate tax that has fallen from 6% to 5.5%
• a strong trade relationship with Mexico.

Its challenge, according to the publication, is a significant skills gap caused by a poor K-12 education system.

Area Development Magazine

We like Area Development’s “Top States for Doing Business” list because consultants making decisions about commercial property for lease or purchase rank states on categories that address decisions on facility and location.

In the 2016 list, Arizona ranked 15th overall. That’s an improvement from its 19th ranking in 2015.

The state took the ninth spot in the categories of “favorable regulatory environment” and in a tie for ninth for “most improved economic development policies.”

“Arizona is predicted to continue its strong economic performance in high-tech and innovative industries,” the magazine says in giving the state its 2016 Silver Shovel Award for states with five to eight million residents.

Site Selection Magazine

We also like the “Top State Business Climate Rankings” from Site Selection for the same reason as for Area Development: Its survey results come from executives responsible for looking at commercial real estate for their companies.

For 2016, Arizona’s business friendliness tied for 18th in the overall rankings, but was placed in the 15th slot by site selectors. The state’s competitive ranking was 22nd, virtually the same as its 2015 ranking of 23rd.

The state’s highest category ranking—14th—appeared in new plants in 2015 and its tax index for mature firms.

The lowest category ranking was in 2015 new plants per capita, 33rd.

CNBC

Arizona jumped nine points to 25th in the “2016 Top States for Business” survey by the business cable station. The ranking was boosted by the state’s number-five position in “workforce,” compared to number 14 in the previous year.

Big jumps in the “economy” (15th) and “business friendliness” (8th) categories compared to the previous year also were recorded. The lowest category ranking (47th) was in “education,” although that was a slight improvement over the state’s previous 49th ranking.

Forbes Magazine

“Best States for Business” by Forbes gave Arizona a dip in rankings, from 23rd in 2015 to 26th in 2016.

Most of the measurements for the list showed only slight changes up or down for Arizona. Its biggest dip was eight points in “regulatory environment” (28th). The biggest jump in rankings came in “economic climate” (27th).

Arizona’s best ranking came in “growth prospects” (5th); its worst was “quality of life” (39th).

The magazine says Arizona’s “job and economic growth forecasts over the next five years are among the best in the U.S.”

Commercial Real Estate Group of Tucson specializes in representing tenants and corporate users across the United States. For more information call +1-520-299-3400.