Alabama Ranks No. 7 Among Top States for Doing Business

Alabama has moved up one spot in a national ranking examining states’ competitiveness for business investment, earning three No. 1 category rankings along the way.

Area Development magazine ranked Alabama No. 7 overall in its 2026 Top States for Doing Business report, up from No. 8 in both 2024 and 2025. The publication’s 2026 analysis was based on evaluations from 50 site consultants across 20 location factors.

Alabama earned the No. 1 ranking for overall cost of doing business, property tax environment and labor cost competitiveness. The state also ranked No. 3 for business incentive programs and No. 4 for both its regulatory environment and permitting and development predictability.

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Other top-10 finishes included No. 5 for workforce training programs and cooperative state and local government, No. 6 for energy availability and grid capacity, and No. 7 for site readiness, industrial site and building availability, and overall speed to market.

Gov. Kay Ivey highlighted the results in announcing the ranking Wednesday.

“This latest ranking by Area Development sends a clear message that Alabama is one of the most business-friendly states in the nation,” Ivey said. Alabama Governor's Office

The ranking comes after Alabama reported a record year for economic development in 2025. According to the Alabama Department of Commerce, 234 announced projects represented $14.6 billion in capital investment and 9,388 new job commitments, the highest annual investment total reported by the state.

Alabama Commerce Secretary Ellen McNair said companies consider factors beyond taxes when deciding where to invest, including available industrial sites, workforce, energy and the predictability of the development process. The governor’s office said roughly $300 million has been invested in site development around Alabama in recent years. Alabama Governor's Office

Area Development’s overall ranking placed six states ahead of Alabama: Georgia, Texas, Tennessee, North Carolina, Ohio and South Carolina. Virginia, Louisiana and Michigan rounded out the publication’s top 10.