Study Ranks States Best-Equipped to Weather a Recession
Best States to Survive a Recession in 2020

Study Ranks States Best-Equipped to Weather a Recession

If you’ve been paying any attention to financial news over the past several months, you’ve undoubtedly heard talk about a potential recession on the horizon. With the United States currently in its longest-ever period of economic expansion, it’s only logical to speculate on when our good fortunes might taper off. But, if a recession were to arrive in the next year, what parts of the U.S. would fare the best?

A new study from FitSmallBusiness compiled various data points to determine which states are best prepared to survive a recession if one were to begin in 2020. To arrive at this list, the site considered such criteria as economic diversity and financial stability. Specifically some of the factors that weighed in the final rankings include the amount of stabilization funds available, debt to income ratio, unemployment rate, median home value, exports per capita, state income tax rate, the state’s performance during the 2008 “Great Recession,” and more.

Under those guidelines, the study found that Texas is the state best equipped to weather a 2020 recession. This high ranking is partially thanks to the Lonestar State’s 1.16 debt to income ratio (the second-lowest in the nation), its 0% state income tax rate, and its mere 0.6% GDP decease during the previous recession. Additionally Texas has the third-highest exports per capita while also being home to an array of industries.

Behind Texas at the top were West Virginia, Nebraska, Indiana, and Alabama. Interestingly third-place Nebraska actually slipped from the number two slot it held when FitSmallBusiness previously compiled this data in 2017. Taking its place, West Virginia rose from its eighth-place ranking last time around, partially due to its geographically diverse export partners — Canada, India, and the Netherlands.

As for the rest of the top 10, North Dakota, Michigan, Iowa, Georgia, and Tennessee all made the cut. Of those the most notable performance was North Dakota, which fell to number six after topping the list in 2017. That fall can be explained by relatively low “rainy day fund” coupled with the state’s reliance on exports to Canada. In fact, a whopping 88% of North Dakota’s exports are to our northern neighbors. Meanwhile the states least prepared for a 2020 recession include Montana, Hawaii, Arizona, New Mexico, and New Jersey.

Discussing the intentions behind this latest study, FitSmallBusiness chief content officer Eric Noe said, “Our purpose with this study was to shed light on economic indicators that could be key-difference makers in the future.” With that said, considering some of the major ranking moves that have occurred in just the past two years, it would seem that timing might just be the most important factor of all. To that point, here’s hoping that 2020 proves to be recession-free after all.

Leave a Reply

The "Email" field is empty, you must enter some text to proceed.The text you entered in the "Email" field appears to be invalid, please edit it and try again
Get the Latest News Delivered to Your Inbox

A Guide to Building Credit and Increasing Your Credit Scores

When it comes to credit, there’s some good news. The average credit score in the United States has been steadily rising in recent years, coming in at 715 in 2023. That may be because, today, consumers not only have more ways to access their credit reports and scores than ever before but also because there are an increasing number of options that Americans have for building credit in the first...

2024 SoFi Checking and Savings Review

Ever since I started taking an interest in the FinTech sector, one company whose name I’ve seen pop up over and over again is SoFi. Lately it seems as though that theme has been sent into overdrive as the company has not only become a household name thanks to its stadium naming rights deal but also because of the company’s continued product expansions. The most interesting development in my mind...
Chase Freedom Flex card

Chase Reveals Q2 2024 Freedom 5%(+) Bonus Categories

Chase has announced its bonus category picks for the second quarter of 2024 — including some interesting twists. About the categories: As April approaches, Chase has revealed what categories Freedom and Freedom Flex cardholders can earn bonuses on. From April 1st through June 30th, customers can earn 5% (or more) in three categories: Amazon.com, Hotels, and Restaurants. Similar to how Chase embraced a "New Year, New Me" theme last quarter,...
H-E-B and Central Market  credit cards

Imprint Launches Credit Cards from H-E-B and Central Market 

The FinTech Imprint is partnering with the popular Texas-based grocery chain H-E-B for a pair of new rewards credit cards. This week saw the launch of the H-E-B Visa Signature Credit Card as well as the Central Market Visa Signature Credit Card. With these two (nearly identical) options, customers will be able to earn rewards on groceries and beyond. First, both versions of the card earn up to 5% back on select...

FedEx Announces Winners of 11th Annual 2023 Small Business Grant Contest

Nearly three months after the entry period ended, FedEx has announced the winners of its 11th annual Small Business Grant Content. This year's event saw more than $300,000 in funds going to a variety of small businesses across the nation. Last month, the company revealed 100 finalists, with that list now being narrowed down to just 10 winners. This year's grand prize winners included KindVR, The Cupcake Collection, Up In...