Forbes magazine added a new category to its “Best States for Business” factors this year – “regulatory category is a measure of laws that protect people from employment discrimination based on sexual and/or gender identity ” – and that hurt North Carolina because of House Bill 2.

However, the state still ranks No. 2 on the “best states” list.

The new list released Wednesday ranks the Tar Heel state second behind Utah for the second straight year. But Forbes also points out that House Bill 2 – derided as the “bathroom bill” – hurt North Carolina since the new measure is designed to address such issues as LGBT (lesbian, gay, bisexual, transsexual) protection.

“LGBT policies are affecting the bottom line in places like North Carolina, which passed the controversial HB2 or “Bathroom Bill” this year requiring citizens to use the public facility that corresponds with their biological gender,” Forbes reports.

And Forbes duly points out all the business the state has lost, as has been widely reported by media across North Carolina and the country.

“The measure has already cost the state an estimated $630 million in economic activity,” Forbes says. “The NBA, ACC and NCAA pulled sporting events from the state and Deutsche Bank and PayPal halted expansions.”

Still, Gov. Pat McCrory’s office hailed the Forbes report even as McCrory faces re-election defeat (he’s fighting the results that show Attorney General Roy Cooper with a near 5,000 vote advantage) due in part to HB2 opposition.

“This ranking is further affirmation that our pro-growth economic policies and excellent business climate have once again made North Carolina a top destination for jobs,” McCrory said in a statement. “Our economy continues to outperform the nation as we are home to the most improved tax climate in the country and have added more than 300,000 new jobs since 2013.”

Forbes points out that the state “is the only state to appear in the top five of our Best States study every year” since launch 11 years ago.

McCrory’s office also pointed out that North Carolina ranked highly in two other economic development surveys:

  • No. 2 in Site Selection magazine
  • No. 3 for business climate in Chief Executive Magazine.

But Forbes noted that HB2 fallout continues.

“Some clients are actively staying away from North Carolina because of [HB2],” Jeff Lessard, who works with clients on their occupancy and location strategies at Cushman & Wakefield, told Forbes.

Forbes considers 40 metrics for its ranking, gathering data from 17 different sources.

Overall categories include:

  • Business costs
  • Labor supply
  • Regulatory environment
  • Economic climate
  • Growth prospects
  • Quality of life

The new category, which includes LGBT issues, was compiled by the Movement Advancement Project. It listed 18 states as “hostile” and that score dropped North Carolina three spots in regulatory environment to seventh, Forbes notes.

What’s driving growth?

“Foreign direct investment has fueled much of North Carolina’s high-tech job growth, with $2.7 billion and 5,300 jobs generated from FDI in 2015, according to North Carolina Commerce Secretary John Skvarla, who says the state is on track to top those numbers this year,” Forbes says.

The magazine also notes that N.C.”has the second smallest union workforce in the U.S. in terms of percent of total employment [behind S.C.]The resulting benefit is labor costs that are 11% below the national average—fourth lowest in the country.”

Read more from Forbes at:

http://www.forbes.com/sites/kurtbadenhausen/2016/11/16/the-best-and-worst-states-for-business-2016/#61f7e9da112b