The good news is that Utah is still in the top three of Forbes' annual ranking of the "Best States for Business."

The bad news? Utah surrendered the top spot to North Carolina and fell behind Texas in this year's rankings.

The business magazine says Utah fell from #1 to #3 this year because of rising costs and a softening economy.

Utah, which occupied the No. 1 ranking six times in the past seven years (Virginia in 2013 was the lone outlier), fell to third this year due to rising labor costs and a softer economic outlook. The state still has a very pro-business climate and companies benefit from energy costs that are 16% below the national average, according to Moody's Analytics.

Positive numbers for Utah in the rankings include labor supply (#2), regulatory environment (#3), economic climate (#8) and growth prospects (#9). 

On the downside for Utah, business costs rank 23rd according to the analysis and quality of life is just 25th.