Take Shelter in One of These States

NEW YORK, Oct. 23, 2019 /PRNewswire/ -- It was already a decade ago, but none of us will forget The Great Recession of 2008. Unemployment skyrocketed, the housing market plummeted, Americans lost billions in personal assets, and businesses across the country shut their doors for good. While the stock market skyrocketed in recent years, economic indicators now point to another looming recession. So, that begs the question: Are you prepared to weather the storm? The answer may depend as much on where you are as it does who you are.

New data compiled by FitSmallBusiness.com reveals that location plays a HUGE factor in the ability to weather the next recession, and U.S. states vary widely in their preparedness.

FSB editors dug into state and federal economic data and found that the states best positioned to withstand an economic recession are those with a wide variety of businesses, diverse global trade partners, and a robust debt-to-income ratio. Most significantly, the list of states best equipped for a slowdown has changed dramatically from our inaugural survey two years ago.

Midwestern states like Indiana and southern states such as Texas, Alabama, and Georgia were in the best position to tolerate a future financial collapse. Each of these states experienced significant drops in their respective debt-to-income ratios from 2017 to 2019.

Overall, half of the Top 10 states are new this year, including Texas, which moved from No. 15 in 2017 to No. 1 in this year's study.

When a state has a multitude of trade partners across the globe, it makes its economy more diverse - meaning, it's not solely reliant on one source. West Virginia, for example, moved up six spots because of its diverse portfolio of partners including India and the Netherlands. In contrast, North Dakota dropped to No. 6 in 2019, down from the No. 1 ranking in 2017, due to the fact that 88% of its exports go to just one country -- Canada.

While the list can be viewed below, you can find the full report HERE.

The Best States to Survive a Recession in 2020

1. Texas
2. West Virginia
3. Nebraska
4. Indiana
5. Alabama
6. North Dakota
7. Michigan
8. Iowa
9. Georgia
10. Tennessee

By factoring in key criteria below, the study found that despite some differences, each state maintains a healthy, diverse economy and firm financial stability. The editors at FitSmallBusiness used the following weighted metrics as criteria:

• Stabilization (aka Surplus or Emergency) Funds Available (15%)
• Economic Strength & Diversity (15%)
• Debt-to-Income Ratio (10%)
• Unemployment Rate (10%)
• Median Home Value (10%)
• Exports Per Capita (10%)
• Export Diversity (10%)
• Deposits Per Capita (7.5%)
• Average Credit Card Debt (5%)
• State Income Tax Rate (5%)
• 2008 Recession Performance (2.5%)

"Our purpose with this study was to shed light on economic indicators that could be key-difference makers in the future," said Eric Noe, Chief Content Officer. "We learned that the most recession-proof states have positive debt-to-income ratios, and don't rely on one specific geographic region when it came to trade."

About FitSmallBusiness.com:
With a rapidly growing monthly readership of more than 2.5 million, FitSmallBusiness.com is an online publication devoted to helping small business owners.  Its full-time staff of writers spends hours of research, data analysis, and interviews with industry experts to answer the questions that owners want in order to run a successful small business. 

For more information on this list and this topic, please contact Sarah Johnson, [email protected], 917-864-6355.

SOURCE FitSmallBusiness.com

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