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The Best Places For Business And Careers

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The U.S. economy continues to sputter along with frustratingly high unemployment and sluggish GDP growth, but there are pockets of the country that are booming with 4% unemployment and 8% economic growth. Companies looking to squeeze costs and maximize productivity are increasingly turning to these locales to relocate operations and open new offices.

You won’t find many of these areas on the two coasts. Cities in California and New England are saddled with high business costs and heavy regulatory burdens. States in the heartland, like Utah, Texas, Nebraska and Colorado, have the best business climates right now.

Topping our 14th annual list of The Best Places for Business and Careers is Provo, Utah. The $16 billion economy is thriving largely on the back of Brigham Young University. The school provides a stabilizing presence as the third-largest private college by enrollment in the U.S. The school is also generating new jobs. During 2010 it ranked third in the numbers of start-ups produced through university research—13 in total—behind only the nearby University of Utah (18) and MIT (17).

Job growth was a robust 3% in the Provo metro in 2011, third best in the U.S. It enjoys—by far—the lowest violent crime rate in the U.S. and ranks tenth lowest overall for crime, including property crime. The metro population has doubled over the past two decades to 542,700.

The 25 Best Places For Business And Careers

Complete Coverage: Best Places For Business And Careers

Joining Provo in the top 10 is sixth-ranked Ogden, Utah. Last year, 30 miles north of the city, Procter & Gamble opened its first U.S. manufacturing plant in more than three decades. The $540 million facility will create 1,000 new jobs in the area. Median household incomes in Ogden are a robust $60,625.

To gauge the best places for business in the U.S., we rate the 200 largest metro areas on a dozen factors. Forbes uses data from Moody’s Analytics, the U.S. Census and Bert Sperling, who runs Sperling’s BestPlaces. We consider job metrics, costs, income growth, quality of life, education of the labor force and more (click here for a detailed methodology).

Last year’s top city, Raleigh, N.C., dipped to No. 2 this year as living costs rose to 5% above the national average. Raleigh continues to be an attractive destination for companies with business costs 18% below the national average, according to Moody’s Analytics, and a highly educated workforce thanks to nearby schools like North Carolina State, Duke University and University of North Carolina.

Job seekers are making their way to Raleigh as its net migration rate was the second highest in the U.S. over the past five years. A net 116,500 people have moved to Raleigh since 2007.

Texas dominates the ranking with five cities in the top 25, led by eighth-ranked Dallas. The Dallas economy surged 6.2% last year—second best in the nation—to $254 billion. The job outlook in Dallas is strong with 2.9% annual growth expected through 2014, according to Moody’s. Dallas is home to 17 billionaires, more than any other U.S. city besides New York and San Francisco.

Houston ranks No. 20 as it emerged from the recession faster than any other major city. It was the fastest-growing local economy in the U.S. last year, expanding 8.6%. Energy companies continue to flock to Houston to take advantage of the vast talent pool of workers in the oil and gas industry. Exxon Mobil is building a 385-acre complex in Houston suburb, The Woodlands, that will accomadate 10,000 employees. The company plans to transfer 2,100 employees from Fairfax, Va. as well as 110 from Akron, Ohio, to Houston. BP and Anadarko Petroleum are consolidating U.S. operations in Houston as well. (See "While Rest Of U.S. Economy Plods, Houston Gets Hot")

Energy companies power the Houston economy, but health care, transportation and technology are gaining. Three of the four top medical research institutions in Texas are based here. The Port of Houston generates $179 billion in annual statewide economic impact, according to a 2012 study. NASA and the Johnson Space Center make it an aerospace hub as well. “[Oil and gas] is still king here, but there are so many different pieces to it that we are not a one-industry town,” says Mayor Annise Parker.

California cities occupy half of the bottom 10 spots in our ranking. Stockton, which is on the brink of a bankruptcy filing, ranks No. 196. Only Las Vegas had a higher foreclosure rate in 2011, according to RealtyTrac. Merced, Calif. clocks in at No. 199. Only 12% of adults have a college degree in the Central Valley city. Bringing up the rear is Modesto, Calif., where the unemployment rate is 17.7% Modesto has seen employment fall four straight years.

The Golden State did place a city in the top 25 for the first time since 2005 when San Diego made the cut. San Francisco ranks No. 23 due to a strong job and economic outlook despite the nation’s highest living costs—a staggering 54% above the average U.S. city. San Fran has a highly educated labor force with 48% of the population possessing a college degree.

The 25 Best Places For Business And Careers

Complete Coverage: Best Places For Business And Careers

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