MONTGOMERY, AL. — Alabama has been ranked seventh nationally in Area Development magazine’s 2026 Top States for Doing Business report, moving up one position from its eighth-place rankings in 2024 and 2025.
Governor Kay Ivey announced the results Wednesday, highlighting Alabama’s continued placement among the nation’s top 10 states for business competitiveness.
The annual report evaluates states across 20 factors related to business operations, economic development, infrastructure, workforce availability and investment opportunities. Alabama received three first-place rankings and placed among the top 10 in 12 additional categories.
The state ranked first nationally in property tax environment, overall cost of doing business and labor cost competitiveness.
Other notable rankings included third in business incentive programs, fourth in regulatory environment and permitting and development predictability, and fifth in workforce training programs and cooperation between local and state governments.
Alabama also ranked sixth in energy availability and grid capacity, seventh in industrial site readiness and availability, and eighth in access to skilled manufacturing labor.
“Alabama is, indeed, open for business!” Ivey said in a statement announcing the rankings. “This latest ranking by Area Development sends a clear message that Alabama is one of the most business-friendly states in the nation, offering the policies, infrastructure, skilled labor and space for companies to thrive.”
The recognition follows a year of significant economic development activity in Alabama. According to figures released by the governor’s office, companies announced a record $14.6 billion in new investments during 2025, along with plans to create more than 9,000 jobs statewide.
State officials have also reported approximately $300 million in investments toward industrial site development in recent years, an effort intended to improve Alabama’s ability to attract companies seeking locations for new or expanded operations.
Alabama Department of Commerce Secretary Ellen McNair said the rankings reflect ongoing efforts to address the factors companies consider when selecting business locations.
“Companies are looking for more than a favorable tax climate. They need development-ready sites, a skilled workforce, reliable energy, predictable permitting and communities that are ready to move quickly when an opportunity comes their way,” McNair said.
Workforce development was another area in which Alabama received national recognition. The state ranked fifth for workforce training programs and eighth for access to skilled manufacturing labor.
Kevin Taylor, executive director of Alabama Industrial Development Training (AIDT), said workforce preparation remains an important component of the state’s economic development strategy.
“Alabama’s competitiveness isn’t just about low taxes or incentives. It’s rooted in our people,” Taylor said.
The rankings provide a comparison of states based on factors considered important to corporate location decisions. They do not independently measure all aspects of economic performance, such as household income, overall employment growth or the long-term economic effects of business incentives.
Alabama’s improved position comes as the state continues efforts to attract investment in manufacturing, aerospace, automotive, technology and other industries.
The complete rankings and methodology are available in Area Development magazine’s 2026 Top States for Doing Business report.
