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Kentucky ranks high for business climate

Frankfort, KY - Gov. Andy Beshear's vision for building a better Kentucky continues to charge ahead as the commonwealth recently tied for fifth nationally on Site Selection magazine's 2021 Prosperity Cup list, an annual ranking of the top U.S. states for business climate.

"Every day we are working to create a brighter future for Kentuckians, with quality jobs, better wages and educational opportunities for all residents," Gov. Beshear said. "Site Selection's 2021 Prosperity Cup rankings offer the latest proof that Kentucky is positioned for success, and our state's economy is poised for tremendous post-pandemic growth. The strength of our project announcements in 2020 shows existing Kentucky companies are dedicated to building something special in our state and new companies continue to discover the many benefits of locating in the commonwealth. This top-5 placement indicates a major step forward for Kentucky, but we are just getting started."

Kentucky's top-5 placement in the 2021 rankings reflects recent growth in the commonwealth, as the state ranked ninth overall the previous year. In addition to its strong showing nationally, Kentucky ranked No. 2 in the South Central region, a rise from the fourth position in 2020.

Site Selection determines its Prosperity Cup rankings through a Prosperity Points system. The system is based on overall and per 1 million population figures for several criteria from the previous calendar year, including new and expanded facilities, capital investment and jobs created based on those projects. The points system also considers each state's ranking in the corporate real estate executive portion of the 2020 Site Selection Business Climate Ranking, state tax climate as ranked by the Tax Foundation, performance in the Beacon Hill Institute's State Competitiveness Index and the number of National Career Readiness Certificates per 1,000 residents ages 18-64, according to ACT - Workforce Development Division, administrator of the ACT Certified Work Ready Communities initiative.

In 2020, Kentucky announced 233 new location and expansion projects, according to data from the Kentucky Cabinet for Economic Development. Those projects are expected to create nearly 8,000 jobs with the highest average hourly wages in years.

Last year, rural counties attracted 121 - or more than 52% - of the 233 private-sector projects announced, while 112 went to the 10 most-populated counties; Jefferson, Fayette, Kenton, Boone, Warren, Hardin, Daviess, Campbell, Madison and Bullitt. Urban counties will claim 4,372 of the new jobs announced - about 55% - and rural counties account for 3,567, or nearly 45%.

Kentucky's top-5 placement in the Prosperity Cup rankings is the latest evidence of growing economic momentum in the commonwealth, as the state builds back stronger following the effects of the pandemic.

In March, Site Selection's annual Governor's Cup rankings for 2020 positioned Kentucky atop the South Central region, and third nationally, for qualifying projects per capita. The commonwealth also placed seventh overall in total projects, the highest of any state with a population under 5 million.

Last month, Moody's Analytics published a positive economic outlook for Kentucky, noting mass vaccination as the driving force behind a sustained recovery in consumer services. The state's recovery, Moody's said, benefited from earlier reopening efforts and increased demand for manufactured goods over services. The report also found Kentucky's manufacturing industry outperformed the nation's since the national downturn last year.

Fitch Ratings last month improved the state's financial outlook to stable, reflecting the commonwealth's solid economic recovery. The state's April sales tax receipts set an all-time monthly record at $486.5 million, as did vehicle usage tax receipts at over $64 million.

This story was posted on 2021-06-18 23:31:08
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