With the governor calling for tighter purse strings, the oil-rich state of North Dakota said it had one of the strongest business environments in the country.

For the fifth year in a row, the North Dakota government said it earned the No. 2 spot in a competitiveness report from Beacon Hill Institute.

"State leaders and legislators have placed an emphasis on improving the state's business climate," North Dakota Commerce Commissioner Al Anderson said in a statement. "This study reflects the ongoing success of their efforts."

The report ranked North Dakota, the No. 2 oil producer in the nation, in the top 10 in terms of skilled labor and infrastructure investment. In terms of some of the employment metrics gauged by Beacon Hill, the state ranked the best in the nation. The overall rate of unemployment was 3.2 percent.

This week, however, Gov. Jack Dalrymple called on agencies in control of the state's general fund to cut the two-year budget by another 2.5 percent to help offset a projected $310 million budget shortfall. Lawmakers are in a special session through Thursday to review the budgetary strains.

In February, the governor moved on a stabilization effort to help cover the budget shortfall.

"Since then, depressed market prices for crude oil and agricultural commodities have continued to stifle state revenue collections, especially sales tax receipts in western North Dakota," the governor's office said in a statement.

Exploration and production activity in the state has been on the rise as crude oil markets start to show some level of stability. State data show crude oil production in May, the last full month for which data are available, was 0.5 percent higher than the previous month to average 1.04 million barrels per day.

Exploration and production work, however, is still down more than 50 percent from last year. Crude oil production, meanwhile, is down 15 percent from the all-time high reached in December 2014.

Lynn Helms, the director of the North Dakota Industrial Commission's Oil and Gas Division, said lower crude oil prices were behind the slump in the state energy second. Oil prices weakness, he said, could last into the second quarter of next year.