CNBC Ranking: MA Among Worst States for Cost of Doing Business, While Overall Ranking Improves

Massachusetts is once again among the most expensive states for the cost of doing business in 2026, according to a new index published this week.

CNBC just released its annual “Top States for Business” ranking, which used 138 metrics across 10 categories to rate the competitiveness of all 50 states. The Commonwealth landed the No. 15 spot overall, an improvement over 2025 (No. 20). But Massachusetts also ranked No. 49 for the cost of doing business, receiving an “F” grade — the second-worst state in America. 

A deeper dive into the metrics shows us where the Commonwealth is succeeding, and where we’re falling behind. 

Massachusetts Leads in Education and Innovation

Our state jumped to the number one spot in education in 2026. And we remain at the top of the pack when it comes to technology and innovation, quality of life, and access to capital. 
While Massachusetts is still in the top 10 states for technology and innovation (claiming the eighth best spot), our ranking slipped slightly this year from fourth last year. There have been signs of strain recently, as the state’s professional, science, and technical services industry saw a near-6% drop in employment in 2025 compared to the previous year – the largest employment decline for any sector in the state. 

Business friendliness also saw a big bump, from No. 42 to No. 27 place this year. This is likely in part due to CNBC’s emphasis on friendliness to “emerging industries,” such as artificial intelligence, quantum computing, cryptocurrency, and prediction markets. Massachusetts lawmakers have pushed to attract AI and data companies, issuing grants to build out tech infrastructure over the last couple years. 

While this jump is encouraging, we are still competing with other states to attract business investment. New Hampshire, Tennessee, North Carolina ranked in the top 10 states for business friendliness, well above Massachusetts. Data on actual businesses forming and operating in the Commonwealth shows there may be more to the calculus of a business deciding whether or not to set up shop here.

Cost of Doing Business Continues to Drag Down Our Grade

Businesses in Massachusetts are still struggling under burdensome costs. Bureau of Labor Statistics data showing there were roughly 25% fewer businesses opening than closing last year, and a relatively low number of new business applications. 

Meanwhile, our competitor states like Florida and North Carolina are among the top half of states for cost of doing business, ranking No. 15 and No. 20 respectively. Neighboring New Hampshire also ranked above us, coming in at No. 36.

A recent Pioneer report finds new business formation rates are growing nationally – especially in these competitor states – while Massachusetts had some of the lowest new business formation and establishment growth rates in the nation in the last several years. Massachusetts’ current efforts to attract new business growth are eclipsed by the cost of doing business here.

Our workforce ranking also dropped by 3 spots, to No. 26 this year, putting us in the bottom half of states. Our competitor states are better: Texas, Florida, and North Carolina top the nation. New Hampshire also ranks 15th best. The latest Bureau of Labor Statistics data show Massachusetts had a higher six-month average unemployment rate than competitors (4.74%): New Hampshire’s was 3.45%, North Carolina’s was 3.87%, and Florida’s was 4.66%.

Opportunities For Improvement

Massachusetts improved slightly when it came to cost of living, going from No. 43 to No. 39, but is still at the back of the pack. This could be due to a few factors.

For starters, Massachusetts has one of the 10 highest total state tax burdens in the nation. Recent MOA polling shows high cost of living and taxes were top concerns for a vast majority of Massachusetts voters, and a Suffolk University/Boston Globe poll shows they’re driving residents to consider moving to other states.

Cost of living overall is still an issue for Bay Staters. Even as inflation cools across the nation, the Commonwealth remains one of the most expensive states in the country. While residents earn higher-than-average personal income levels, the state’s overall cost of living is steep. The latest data from the Bureau of Economic Analysis shows Massachusetts has the 7th-highest overall prices in the country.

Steep housing costs have also contributed to a high cost of living. The latest data from the Bureau of Economic Analysis shows Massachusetts has the third highest cost of housing nationwide, and second highest cost of utilities. In fact, Census Bureau data shows the share of Massachusetts residents owning a home dropped roughly 4% from last year.

Our economy overall dropped by one spot, putting us in 16th place. A troubling trend overall, especially since many of our competitor states have us beat. North Carolina’s economy was in number one place. Texas earned second place, Ohio, ninth place, and Florida and Tennessee tied in 11.

Conclusion

Massachusetts has all the building blocks of a world-class economy. We boast exceptional schools, a talented workforce, cutting-edge research, and an innovation ecosystem envied across the globe.

The challenge is making sure businesses and families can afford to stay and grow here. If policymakers can tackle the high costs of doing business and living in the Commonwealth, there’s every reason to believe Massachusetts can once again be one of the nation’s most competitive places to build a business and a career.