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Top Trends & Insights from the 2025 Competitiveness Redbook for Maryland
Feb 6, 2025
The 2025 Competitiveness Redbook is here
The Maryland Chamber of Commerce is proud to release the 2025 Competitiveness Redbook, our in-depth, data-driven analysis of Maryland’s economic performance across more than 50 critical metrics. Now in its third year, the Redbook serves as a vital tool to inform policy discussions, spark strategic partnerships, and guide efforts aimed at strengthening Maryland’s competitiveness.
This year’s report not only highlights our enduring strengths but also reveals emerging challenges that demand immediate attention.
Critical Trends for Maryland's Competitiveness in 2025
Areas of Concern for Competitiveness:
- State Business Rankings:
Maryland fell significantly in CNBC's 2024 ranking of the Top States for Business, sliding from 22nd in 2023 to 31st in 2024. Moreover, it has become the 3rd most expensive state to do business in, and its infrastructure ranking plummeted from 15th to 37th, signaling growing concerns about our investment in critical infrastructure.
- State Business Tax Climate:
Maryland’s overall state business tax climate is a troubling 46th in 2025, with declines in key tax categories. The state now ranks 37th for corporate tax rates (a drop of 4 positions) and 39th for sales tax (down 5 spots), making it an increasingly less attractive environment for business investment.
- Economic Freedom:
Challenges persist in Maryland’s economic freedom rankings. The state stands at 45th in overall economic freedom (down from 44th in 2021), 47th in fiscal policy freedom (a significant drop from 24th in 2021), and 35th in regulatory freedom (improved from 47th in 2021). These figures reflect mounting barriers to growth and a less business-friendly climate.
- Minimum Wage:
Maryland is ranked 7th in the nation for minimum wage — tied with Delaware, Illinois, Massachusetts, and Rhode Island. While this underscores a commitment to workers, it also increases business operating costs and could deter expansion or relocation.
- Domestic vs. International Migration:
Between April 2020 and July 2023, Maryland experienced a net loss of 99,579 residents through domestic migration (ranking 44th nationwide), while international migration brought in 66,062 new residents (ranking 12th). This net domestic loss suggests that Maryland is struggling to retain its residents, which may hinder long-term economic growth and diminish our talent pool.
- Long-Term Job Growth:
From September 2014 to September 2024, non-agricultural employment in Maryland grew by 139,000 jobs, ranking 30th among the states. However, the state’s percentage job growth, ranked 39th, points to a sluggish labor market relative to our peers.
- Education Spending:
In the 2021–2022 school year, Maryland spent $17,753 per public school student — ranking 14th nationally. While spending on instruction (10th) and support services (20th) is strong, there remains a need to ensure that educational outcomes align with workforce demands.
- Commute Times:
Maryland’s major metro areas face some of the longest commutes in the country. With the Washington Metro at 3rd, Baltimore Metro at 10th, and Philadelphia Metro at 13th for commute times in 2023, the collapse of the Francis Scott Key Bridge has only worsened congestion and travel times.
- Road Investment:
The state ranks 38th for total per capita investment in roadways, 39th for capital investment per capita, and 27th for maintenance investment per capita. Insufficient road investment is contributing to poor road quality and extended commute times for businesses and residents alike.
- Homeownership:
Maryland’s homeownership rate slipped to 27th in 2024 — down from 15th in 2023 — with a 2.8% decline from 2019 to 2024, ranking 47th for the steep decrease. This drop may signal a growing affordability crisis and a diminished ability for residents to build long-term roots in our state.
Strengths & Opportunities at a Glance:
- Innovation and R&D Performance:
On a positive note, Maryland remains a leader in innovation. The state ranked 11th for total venture capital investment and 9th per capita in 2023. It also leads the nation in academic R&D spending (1st) and holds a solid 18th position in industrial R&D, underscoring our strong commitment to research and startup growth.
What's Next?
The 2025 Competitiveness Redbook is more than just a collection of data points — it’s a call to action. The trends outlined in this report underscore a stark reality: Maryland faces fierce competition from neighboring states. Without swift, decisive reforms, our state risks losing its status as a thriving business hub. High business operating costs, sluggish job growth, rising taxes, and underinvestment in infrastructure are pushing both businesses and residents to seek better opportunities elsewhere.
We call on you to use the insights from the 2025 Competitiveness Redbook to inform your decisions, spark discussions and take action. Together, we can make Maryland the place businesses want to invest, grow and thrive.
For a comprehensive look at Maryland’s performance across more than 50 key metrics and to learn more about how you can get involved in advocating for change, explore the full 2025 Competitiveness Redbook for Maryland online at mdchamber.org/Competitiveness.
