Image courtesy of Virginia Tech
Virginia Tech Innovation Campus
Virginia is back on the rise. The Commonwealth landed at No. 3 in CNBC's 2026 "America's Top States for Business" ranking, released July 9 — up a spot from No. 4 last year and a welcome reversal for a state that has spent nearly two decades near the top of the annual scorecard.
Ohio claimed the No. 1 spot for the first time in the ranking's 20-year history, followed by North Carolina at No. 2. Texas and Minnesota rounded out the top five. Virginia has been named the country's top state for business a record six times, most recently in 2024, before federal workforce cuts concentrated in Northern Virginia helped knock it to fourth in 2025 — its weakest showing since 2018.
For a region like Alexandria, where the local economy is tightly wound into the federal workforce, the contractors who depend on it, and the data-center boom in nearby counties, the numbers are more than a talking point.
The governor's take
In a statement from her office, Gov. Abigail Spanberger framed the climb as evidence that the Commonwealth is weathering economic headwinds coming out of Washington. "Since I took office, I have been focused on growing a stronger, more resilient economy — despite the economic uncertainty coming out of Washington, resulting in rising costs, and deep cuts to our federal workforce," Spanberger said. "In six months, we have demonstrated success in doing just that; we have brought more than $5 billion in new business investment to communities across the Commonwealth, creating more than 3,000 new jobs."
She continued: "Virginia's rise in the rankings reflects strategic investments that are helping companies succeed in our Commonwealth. Companies the world over know that Virginia has a reputation as a business environment where world-class talent, leading infrastructure, and a collaborative approach to economic and community development give companies the confidence to grow here."
In a phone interview with Virginia Mercury the same day, the governor pointed to affordability as an under-the-radar driver. "It isn't just that the cost of doing business has improved; it's that the cost of living has improved," she said, crediting a slate of housing, healthcare and energy laws she signed this year — measures she argued make Virginia more attractive to both employers and the workers they hope to keep.
Secretary of Commerce and Trade Carrie Chenery credited collaboration across levels of government. "Virginia's business climate is built on partnership," she said. "By working together across state, regional, and local levels, we have created an environment where companies of all sizes can move faster, access exceptional talent, innovate, invest, and scale."
What actually changed — the methodology told the story
Here's the twist: Virginia rose a spot even though its economy score got worse. The state's economy category ranking slid from No. 14 to No. 23, as CNBC again tied the drop to federal budget and personnel cuts that fall heavily on Northern Virginia.
What lifted Virginia was less about a single new strength and more about which strengths CNBC chose to reward. Each year the network re-weights its 10 categories to mirror how states are pitching themselves. In 2025, amid recession worries, economy carried the most weight — bad news for a federally exposed state. In 2026, infrastructure became the heaviest-weighted category, with economy dropping to second and workforce third. CNBC also factored in ease of permitting for the first time.
That reshuffle played directly to Virginia's hand. The Commonwealth held its No. 2 infrastructure ranking for a second straight year — its single best category — buoyed by the Port of Virginia's newly completed dredging that created the deepest, widest shipping channels on the East Coast, ongoing Interstate 81 corridor upgrades, and the world's largest concentration of data centers, which counts toward the study's measures of large-scale computing power and energy capacity.
Virginia's score rose or held steady in seven of the ten categories. The Virginia Economic Development Partnership noted the state finished in the top 10 in six of them.
Information courtesy of CNBC
Virginia CNBC category comparison.
The bright spots beyond infrastructure: Virginia climbed in workforce (No. 14 to No. 10), technology and innovation (No. 8 to No. 6), quality of life (No. 8 to No. 7) and cost of doing business, a longtime weak spot, which improved from No. 31 to No. 26. The soft spots, aside from the economy slide, were education — which fell from a No. 1 finish to No. 5 amid political turbulence across the state's universities — and business friendliness, down from No. 7 to No. 11 during a divisive session-long fight over how to tax the data centers clustered in Northern Virginia.
By the points tally, Virginia scored 1,595 out of a possible 2,500, up from 1,578 a year earlier, and trailing No. 1 Ohio's 1,623 and North Carolina's 1,614.
The workforce play
The governor's office leaned hardest on talent development as the throughline. Virginia's Virginia Talent Accelerator Program was recently ranked the No. 1 customized workforce training program in the country for the fourth consecutive year by Business Facilities magazine, and InternshipsVA — a statewide paid-internship initiative Spanberger launched in February — earned a national economic development award last month. Lawmakers also allocated another $50 million to the Virginia Business Ready Sites Program this biennium to keep shovel-ready industrial sites in the pipeline.
Regional business leaders echoed the optimism. In the Northern Virginia Chamber's latest quarterly survey, 40% of business leaders said they expect the regional economy to grow over the next six months — the highest reading since late 2025 — while just 6% anticipated layoffs, the lowest on record for that question.
The governor, for her part, isn't treating No. 3 as a finish line. Her stated goal: get Virginia back to No. 1, where it has stood six times before.
What it means for Alexandria
The statewide numbers land close to home. The same federal-workforce exposure that pulled Virginia's economy score down is the central challenge Alexandria named in ALX Forward, the economic framework City Council adopted in January — a plan candid about the city's reliance on federal jobs, rising office vacancies from the shift to remote work, and a tax base leaning heavily on homeowners. In March, Rep. Don Beyer's office joined regional partners on a resource fair for federal workers and contractors caught in the cuts.
At the same time, Alexandria embodies the innovation pitch driving Virginia's rise. The National Innovation Quarter, launched in February with the Alexandria Economic Development Partnership and Virginia Tech among the founding partners, spans Alexandria and Arlington with a mission to accelerate next-generation technology. Paired with the Virginia Tech Innovation Campus taking shape at Potomac Yard, the city is a working example of the talent-and-technology story the Commonwealth is selling — the very categories, infrastructure and innovation, that carried Virginia up a notch this year.
