CNBC's Scott Cohn joins 'Squawk on the Street' to discuss which states ranked last on America's top states for business list.

Anchorage

CNBC's annual rankings of America's top states for business have placed Alaska at the bottom for 2025. The report cites Alaska's heavy reliance on oil, declining oil prices, and high living costs as major factors contributing to its low ranking. Alaska was noted for having the nation's worst economy, second-worst infrastructure, and third-worst education system this year. Efforts to diversify the state's economy, such as carbon storage initiatives and a proposed natural gas pipeline, have yet to yield significant results. Other states near the bottom include Louisiana, Rhode Island, Montana, and Hawaii, each facing their own unique economic challenges.

Alaska ranked bottom state for business

CNBC's out with its annual rankings for America's top states for business. If you missed it, North Carolina took the crown for the third time in four years. But if there's a top state, there's also a bottom state. Our Scott Cohn has a look at who came in last place. Morning, Scott. Good morning, Carl. North Carolina sometimes makes it look easy, but competitiveness is hard. And these bottom states, some of them, they all have some inherent disadvantages, like their size or the location, but they also have some self-inflicted issues, as you will see. Let's take a look. Tied at 46 are Louisiana and Rhode Island. Louisiana, on its economy, it is the most dependent state on the federal government. It also has a weak housing market. And Rhode Island has high costs and heavy regulation. At number 48 is Montana, with America's worst workforce and also the worst-performing workforce development programs. At 49 is Hawaii. It is America's most expensive state, also among the least business-friendly. And that brings us to rock bottom. Alaska, the last frontier, finishes dead last in 2025. There's no way around it. Each state's fortunes are tied to its greatest resource, oil, especially in places like the North Slope. When you look at the economic engine, by default, that happens to be oil and gas, by about 98 percent of our operating budget. A similar story for the state, but the price of Alaska's North Slope oil is down, and state forecasters see it dropping even further. That hurts. When you're paying $16 a gallon for milk, we've got to figure out how to make sure that you can afford to buy the milk so you can live here. Alaska has America's worst economy this year, the second-worst infrastructure, third-worst for education. For decades, policymakers have tried to diversify. Governor Mike Dunleavy is pushing a plan to lease Alaska's vast public lands for carbon storage, but it hasn't taken off. And more recently, a new push for an old idea, a natural gas pipeline to run alongside the Trans-Alaskan Oil Pipeline, opening new markets for a natural byproduct of Alaskan oil production. We have federal officials, cabinet officials, the president of the United States, who want to partner with Alaska in terms of opportunity for our state. As you saw, though, on CNBC last month, the economics of that project are tricky, and they get trickier as the price of oil and natural gas go down. You can read more about the bottom states, the top states, every state in between, and see where your state ranks at topstates.cnbc.com. Guys? Alaska's got a lot of challenges. The lack of sunlight has a bunch of societal effects, Scott. It's hard to get men to move there. The ratio of women to men is very high. Overall, were there a lot of surprises for you on this year's list? I think it was interesting, Carl, that there was movement, because, as you'll remember, we factored a lot of the uncertainty into the rankings this year, things like the federal budget cuts, federal job cuts, which now very well may go forward and have impact on economies of states like Virginia. So Ohio made it into the top five for the first time with a strong infrastructure. It was an interesting, interesting year. Alaska always has a tough time of it in this study each year for the reasons you mentioned, the reasons we mentioned, and you can't get decent connectivity, decent broadband up there either. Yeah, it takes a long time to get from place to place. Great work, as always, every year, Scott, and congratulations to North Carolina. That's our Scott Cohn with Top States for Business.

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