New Jersey slipped to 31st in CNBC’s annual America’s Top States for Business rankings, as the state’s strengths in education and quality of life continued to be overshadowed by concerns over its business climate and the high cost of operating in the Garden State.

The 2026 rankings, released today, evaluated all 50 states using 138 metrics across 10 broad categories that influence business competitiveness, including workforce, infrastructure, economy, cost of doing business, business friendliness, quality of life, technology and innovation, education, access to capital and cost of living.

New Jersey received high marks in several foundational categories, ranking second nationally in education and third in quality of life. The state also continued to benefit from its highly educated workforce, strategic location between New York City and Philadelphia, and strong presence in industries such as pharmaceuticals, biotechnology, logistics and financial services.

But those advantages were offset by continued struggles in categories tied directly to the business climate. New Jersey ranked dead last in the nation for business friendliness and continued to score poorly on the cost of doing business, contributing to its overall decline from 30th to 31st in the national rankings.

In a statement, the New Jersey Business & Industry Association said the report underscores longstanding concerns about the state’s economic competitiveness.

“While it’s a positive to see New Jersey maintain good foundational metrics like quality of life and education, the continuation of our bottom-of-the-pack ranking for business friendliness and high cost of doing business continue to be of great concern,” the organization said in a statement.

NJBIA argued that decades of policies have created a reputation that discourages business investment and pointed to what it described as troubling trends, including companies choosing to expand outside New Jersey and more than 9,000 jobs affected by WARN Act notices so far this year.

The business group also criticized a series of recent state policies that it says have increased costs and regulatory burdens on employers. Among the measures cited were the Corporate Transit Fee, changes to the state’s independent contractor standards, the Climate Superfund law, and a new assessment on certain employers whose workers receive Medicaid benefits.

CNBC’s annual rankings are based on publicly available data from federal agencies, private-sector organizations and independent research groups. The network adjusts the weight of each category annually based on the priorities states emphasize in their economic development efforts.

The rankings have become a widely watched benchmark for comparing state economies and business climates, offering policymakers and business leaders a snapshot of where states are succeeding—and where challenges remain.

For New Jersey, the latest report reinforces a familiar theme: the state continues to excel in producing a highly educated workforce and offering a strong quality of life, while facing persistent criticism over taxes, regulation and the overall cost of doing business.