Brace Yourself If You Live Here: These 10 States Are Least Ready to Weather a 2025 Recession

National Business Capital's New Report Ranks Louisiana, Colorado, and Mississippi Lowest in Recession Readiness

HAUPPAUGE, N.Y., May 8, 2025 /PRNewswire/ -- The chorus predicting a recession is growing louder and more insistent, which makes you wonder, "How bad is it going to be?" Sadly, the answer is, "It depends on where you live." Worse still, according to a new study, "The Least and Most Resilient States to Survive the Next Recession," nearly 6 in 10 Americans live in the half of the states that are likely to suffer more from the effects of poor economic times.

The report from National Business Capital, a leading lending platform for business owners, reveals that 15 of the most populous states are among those least prepared for a recession. That means that more than 200 million Americans can expect to suffer unnecessarily hard times if the economy turns. 

Many of these states - especially in the South and Mountain regions - are facing rising unemployment and mounting household debt. Years of inflation and housing booms pushed everyday costs beyond what most incomes could handle.

Meanwhile, North Dakota, New York, and Nebraska topped the list of states best positioned to weather a downturn. States across the Northern Great Plains and parts of the Northeast performed well due to lower unemployment, stronger state budgets, and more stable cost-of-living trends.

The full study is available HERE:

Key Findings

• Most Americans Live in At-Risk States: 58.1% of Americans live in states ranked 26th or worse for recession resilience.
   
• Populous States in Trouble: 15 of the 25 most populous states finished in the bottom half of the rankings. Five—including Colorado and South Carolina—ranked among the bottom 10.
   
• Southern and Mountain States Most Vulnerable: Eight of the bottom 10 states are in these regions, with higher-than-average unemployment and growing household debt burdens.
   
• Northern Great Plains States Remain Strong: North Dakota (1st), Nebraska (3rd), South Dakota (8th), and Minnesota (9th) were again among the top 10 most resilient.
   
• Unemployment on the Rise: Unemployment increased year-over-year in 40 states; only 10 states saw improvement.
   
• Debt is Outpacing Income: The household debt-to-income ratio rose from 0.80 to 0.84 nationally. Colorado posted the highest ratio at 1.1.

"The impact of a recession is felt at every level; federal and state governments, corporations and individuals," said Joe Camberato, CEO, National Business Capital. "Unfortunately, it's the individual who will suffer."

The 10 States Most Vulnerable in A 2025 Recession

50. Louisiana (score out of 100): 30.8 / Previous rank in 2023: 45th (-5)
49. Colorado (score: 31.6) / Previous rank: 35th (-14)
48. Mississippi (score: 31.8) / Previous rank: 49th (+1)
47. South Carolina (score: 32.1) / Previous rank: 44th (-3)
46. Indiana (score: 34.7) / Previous rank: 9th (-37)
44. Nevada (score: 35.4) TIE / Previous rank: 43rd (-1)
44. Arizona (score: 35.4) TIE / Previous rank: 50 (+6)
43. Idaho (score: 35.8) / Previous rank: 37th (-6)
42. Rhode Island (score: 36.3) / Previous rank: 38th (-4)
41. Kentucky (score: 36.5) / Previous rank: 40 (-1)

The 10 Most Recession Ready States

1. North Dakota (Score: out of 100): 76 / Previous rank in 2023: 1st (+0)
2. New York (Score: 72.4) / Previous rank: 17th (+15)
3. Nebraska (Score: 72.3) / Previous rank: 3rd (+0)
4. Alaska (Score: 69.9) / Previous rank: 2nd (-2)
5. West Virginia (Score: 66.8) / Previous rank: 10th (+5)
6. Delaware (Score: 66.5) / Previous rank: 22 (+16)
7. Montana (Score: 66.2) / Previous rank: 16th (+9)
8. South Dakota (Score: 66) / Previous rank: 8th (+0)
9. Minnesota (Score: 65.6) / Previous rank: 5 (-4)
10. Texas (Score: 65.5) / Previous rank: 14th (+4)

METRICS

• Government reserve balances (14%)
• State GDP per capita (10%)
• Debt-to-income ratio (14%)
• Unemployment insurance coverage (14%)
• Unemployment rate (10%)
• Change in unemployment rate (10%)
• Housing unaffordability (10%)
• Effective tax burden (8%)
• Recent recession performance (10%)

About National Business Capital:
NationalBusinessCapital a pioneer of non-bank financing, provides non-asset-backed financing solutions ranging from $250K to $10MM. Since 2007, the company has financed billions of dollars while innovating how business leaders access growth capital. The team's approach to each transaction allows clients to maximize financing options.

SOURCE National Business Capital