These Cold Northern States Weather the Storm of Uncertainty During Turbulent Economic Times
HAUPPAUGE, N.Y., July 12, 2023 /PRNewswire/ –Cold, upper Midwest states have emerged as the unexpected champions of economic resilience – states most capable of withstanding a potential recession later this year.
As the specter of an impending recession looms, NationalBusinessCapital.com, a trusted fintech lending platform for businesses, released its inaugural report on the “Best States to Recover From A Recession in 2023”. While many assumed that bustling coastal states or economic powerhouses would dominate the list, researchers discovered that states such as North Dakota, Minnesota, Wisconsin, and South Dakota, often associated with frigid winters and rolling farmlands, have emerged as front-runners in weathering economic storms.
From their balanced cost of living and robust job opportunities to prudent budgeting and effective safety nets, these states not only survived – but thrived – in the face of adversity. While the Great Recession of 2008 dealt a devastating blow to economies across the nation, these Upper Midwest states recovered with newfound strength and resilience. The full study is available HERE:
- Migration Boom States Performed Poorly: States with low taxes and affordable housing, like Florida (39th), Tennessee (46th), and North Carolina (48th), saw housing prices rise due to increased demand from new residents relocating from states with higher taxes and salaries.
- Outward Migration Didn’t Help: Despite recent population declines, states like Massachusetts (7th) and West Virginia (10th) made the top 10. However, states with accelerated outward-migration, including New York (17th), California (34th), and Illinois (23rd), displayed a mediocre performance.
- Northern, Midwestern States Strongest: North Dakota (1st), Minnesota (5th), Wisconsin (5th), and South Dakota (8th) demonstrated a geographic trend within the top 10 rankings. These states maintain an economic balance that is resilient to recessions.
- Wyoming Has Lots of Cash: Wyoming (4th) struggled during the Great Recession, but has since invested in its economy. With substantial reserves, Wyoming can sustain itself for almost a year using rainy-day funds.
- Strikingly Low Unemployment: Unemployment rates were generally low across the board. Nevada (43rd) had the highest unemployment rate at 5.4%, while Nebraska (3rd) and New Hampshire (25th) had the lowest rates at 1.9%. Most states had unemployment rates below 4%.
- Red and Blue States Made the Top 10: Recession-resistant states include both red states with lean budgeting and low living costs, as well as blue states with comprehensive social spending.
THE TOP 10 MOST RECESSION-PROOF STATES IN 2023:
#1. North Dakota
#5 (tie) Minnesota
#5 (tie) Wisconsin
#8. South Dakota
Our rankings were meticulously crafted using eight key metrics to gauge each state’s recession performance. By assigning ranks of 0 to the lowest scoring state and 100 to the highest, we multiplied each metric by a designated weight and combined them to derive an overall score. Here are the selected metrics and their respective weights that shaped our insightful findings.:
- State Reserve Balances (17%)
- State GDP per capita (17%)
- Debt-to-income ratio (17%)
- Unemployment insurance coverage (17%)
- Unemployment rate (10%)
- Housing affordability (10%)
- Effective tax rates (6%)
- Great Recession GDP change (3%)
“We were surprised when research showed the Upper Midwest was so well-positioned to weather a recession,” says Joe Camberato, CEO, NationalBusinessCapital.com. “But it makes sense; the balance of frugal management and forward-looking economics policy make these states attractive for businesses and residents in tough times.”
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