Business Facilities 2025 State Rankings underscore Arizona’s rise as a high-tech manufacturing and clean-energy powerhouse.
PHOENIX, AZ (November 6, 2025) — Arizona, a Top 10 State for Business Climate, continues to climb the ranks of business competitiveness, workforce readiness, and advanced manufacturing strength, according to Business Facilities’ 2025 State Rankings Report. The publication, now in its 21st year, evaluates more than 25 categories that influence corporate relocation and expansion decisions across North America, including tax climate, infrastructure, workforce, and sector-specific growth.
#1 in the Nation – Semiconductor Growth
For the second consecutive year, Arizona is ranked the top state for semiconductor expansion. Fueled by the CHIPS and Science Act, Arizona has become the national epicenter of U.S. semiconductor investment. Since 2020, the state has attracted more than 40 new or expanded semiconductor projects, totaling over $102 billion in capital investment and 15,700 direct industry jobs.
Projects from TSMC, Intel, Amkor, and Analog Devices have made the Phoenix-Tucson corridor one of the world’s most concentrated semiconductor ecosystems, with a rapidly expanding supplier network stretching into Pima and Pinal Counties.
“Arizona’s leadership in chip manufacturing demonstrates what can happen when infrastructure, education, and industry strategy align,” said Sandra Watson, President & CEO of the Arizona Commerce Authority. “These investments are transforming our state into a hub for global innovation.”
Top 10 – Solar Power Installation and Growth
Arizona also secured top-tier rankings in both solar installation and growth, reflecting its abundant renewable resources and grid-scale expansion.
In the Solar Power (Installed MW) category, Arizona ranks fifth, following California, Texas, Florida, and North Carolina. In Solar Power (Growth), Arizona again appears in the Top 10, acknowledging its increasing project volume and steady permitting environment.
From large utility-scale sites in Pinal and La Paz Counties to rooftop and commercial installations across metro Tucson, Arizona’s clean-energy footprint continues to accelerate — positioning the state as a long-term supplier of sustainable power to industrial, residential, and data-center users.
Top 10 – Outdoor Recreation Economy
Arizona’s natural assets and tourism infrastructure contributed to its appearance among the Top 10 states for Outdoor Recreation, based on GDP impact and employment concentration. The outdoor economy supports a broad base of Arizona jobs — from guide services and hospitality to equipment manufacturing and public-land management — emphasizing the state’s balance between economic growth and lifestyle amenities that attract workforce talent.
Top 12 – Aerospace and Defense Employment
With major operations from Raytheon Missiles & Defense, Northrop Grumman, Boeing, and General Dynamics, Arizona ranks among the top states for aerospace and defense jobs. The sector anchors southern Arizona’s economy and contributes to a robust supply chain in electronics, optics, and precision manufacturing — all of which align with the state’s semiconductor and advanced materials ecosystem.
Top 10 – Nuclear Energy Generation
Arizona’s Palo Verde Generating Station, the largest nuclear plant in the United States, helped the state secure a Top 10 ranking for Nuclear Energy Production. The plant produces enough electricity for more than 4 million people across the Southwest and supports Arizona’s diverse energy portfolio.
Top 10 – Population Growth
With continuing in-migration from California and the Midwest, Arizona remains among the nation’s fastest-growing states. Between July 2023 and July 2024, Arizona ranked among the Top 10 states for population growth, both in terms of total number and percentage. Expansion in metro Phoenix and Tucson continues to fuel housing demand, infrastructure investment, and retail expansion, creating new opportunities for developers and employers alike.
A Broader Business Climate Picture
While Texas, Virginia, and Florida top the 2025 “Best Business Climate” index, Arizona’s profile continues to strengthen through pro-growth policies, workforce training initiatives, and an expanding innovation economy.
Programs such as Talent Ready AZ and the Build It AZ Apprenticeship Initiative have enhanced workforce pipelines for construction, manufacturing, and tech occupations statewide. Combined with one of the country’s lowest property-tax burdens and a reputation for predictable regulation, Arizona provides a stable environment for corporate expansion.
Arizona’s 2025 Competitive Snapshot
| Category | 2025 Rank | Key Strength |
| Semiconductor Growth | #1 Nationally | $102B investment; 15,700 jobs |
| Solar Power (Installed MW) | Top 5 | Utility-scale & commercial solar expansion |
| Solar Power (Growth) | Top 10 | Rapid permitting & grid development |
| Outdoor Recreation Economy | Top 10 | Strong GDP and employment impact |
| Aerospace & Defense Jobs | Top 12 | Major presence in Tucson & Mesa |
| Nuclear Energy Generation | Top 10 | Palo Verde Generates largest U.S. output |
| Population Growth | Top 10 | Strong migration & labor supply pipeline |
Outlook
With sustained momentum in semiconductors, clean energy, and advanced manufacturing, Arizona’s competitive position has never been stronger. The combination of industrial diversification, population growth, and infrastructure investment suggests continued expansion through 2026 and beyond — with southern Arizona poised to benefit from the next wave of supply chain and logistics development.