Alabama Ranked 8th in the Nation for Business

Alabama has again broken into the top tier for business friendliness. In its 2025 ranking, Area Development magazine placed the State No. 8 overall among U.S. States rated for doing business.

Governor Kay Ivey said the ranking confirms what Alabamians already feel on the ground. “Our State is open for business and built for success,” she remarked, citing low taxes, trimmed regulation, and investments in people and infrastructure as keys to growth.

The Top States for Doing Business report evaluates States across categories like tax policy, workforce, incentives, and site readiness. Alabama’s performance stood out in several categories:

• No. 1 — Favorable Property Tax
• No. 3 — Overall Cost of Doing Business
• No. 3 — Favorable Regulatory Framework
• No. 4 — Business Incentive Programs
• No. 6 — Cooperative Local and State Government
• No. 6 — Site Readiness Programs
• No. 7 — Workforce Training Programs
• No. 7 — Availability of Sites
• No. 9 — Energy Cost

Commerce Secretary Ellen McNair emphasized that the ranking reflects more than favorable numbers. “From our competitive incentives to our nationally respected workforce training programs, Alabama continues to prove that we’re not just participating in the race for economic growth—we’re leading it,” she said.

The timing is notable. Alabama continues to attract major capital projects in automotive, aerospace, chemical, and advanced manufacturing sectors. In September alone, announced projects are expected to bring almost $2 billion in new investment.

Ivey celebrated the State’s consistency under her tenure: “Alabama has placed in the Top 10 of the publication’s annual ranking of State business-friendliness every year of my time as governor.” The State also ranked No. 8 in the 2024 report.

The Area Development report underscores how the standards for economic development have shifted. “States no longer rise to the top simply by offering low taxes or generous incentives,” the report states. “Today, it’s about execution: how quickly and reliably a State can align land, labor, logistics and leadership behind a fast-moving project.”

In a related note, Alabama also made gains in other national rankings. In CNBC’s 2025 Top States for Business, Alabama rose from No. 20 to No. 19 overall, driven largely by a jump in the workforce category.

While Alabama’s results are strong, economic analysts say the State could climb even higher by tightening its focus on infrastructure, workforce, and execution. Area Development’s 2025 report noted that top States today are defined not only by low taxes but by “how quickly and reliably a State can align land, labor, logistics and leadership” behind new projects. That means faster permitting, more efficient utility coordination, and expanded industrial site readiness will be crucial for future growth.

Workforce remains another key factor. Alabama ranks seventh nationally for workforce training programs, supported by AIDT and community college partnerships, but State leaders say continued investment is essential to meet modern labor demands. Expanding apprenticeship opportunities, improving child-care access for working parents, and boosting retention of skilled talent could help Alabama move closer to the top tier.

Business advocates point to infrastructure and energy readiness as deciding factors in the next stage of competitiveness. Strengthening the State’s power grid, improving broadband access, and enhancing coordination between local and State agencies would make Alabama even more attractive to manufacturers and tech investors alike. With those improvements, experts say Alabama could soon challenge the top five in national business rankings.

As State leaders push to attract more investment — especially in rural areas — they say the top-10 ranking will become a tool in marketing Alabama’s readiness. 

“This is a proud moment for Alabama and a signal to the world that we’re ready for what’s next,” said Ivey. “Whether you’re a global manufacturer or a high-tech startup, Alabama has the people, the programs, and the partnerships to help your business grow.”