MONTGOMERY, Ala. (WDNews) — Alabama has moved up one spot in a national ranking of the top states for doing business, placing No. 7 overall in Area Development magazine’s 2026 report.
According to Gov. Kay Ivey’s office, Alabama improved from No. 8 in both 2024 and 2025. The state also received three No. 1 rankings and placed among the top 10 in several other categories evaluated by the publication.
“Alabama is, indeed, open for business!” Ivey said. “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.”
Ivey said the state’s top rankings reflect efforts to recruit investment, prepare industrial sites, develop the workforce and maintain a competitive business climate.
“Earning the No. 1 spot in several critical categories shows that our strategy of recruiting investment, preparing industrial sites, developing our workforce and maintaining a competitive business climate is delivering results,” Ivey said. “I am proud we are a top 10 state for doing business and climbing.”
Area Development’s 2026 report ranked Alabama No. 1 in three categories: property tax environment, overall cost of doing business and labor cost competitiveness. The publication also ranked the state No. 3 for business incentive programs.
Alabama placed No. 4 for its regulatory environment and No. 4 for permitting and development predictability.
The state ranked No. 5 for cooperative local and state government and No. 5 for workforce training programs.
Other rankings included No. 6 for energy availability and grid capacity; No. 7 for overall speed to market; No. 7 for site readiness programs; and No. 7 for the availability of industrial sites and buildings.
Alabama also ranked No. 8 for energy costs, No. 8 for access to skilled manufacturing labor and No. 10 for engineering talent and industry cluster strength.
The rankings are based on a survey of 50 site consultants. Area Development asked respondents to identify the states they considered strongest across 20 factors that affect corporate location and facility investment decisions. The publication then used the results across all 20 categories and a weighting system to determine its overall rankings.
Alabama followed Georgia, Texas, Tennessee, North Carolina, Ohio and South Carolina in the overall ranking. Virginia, Louisiana and Michigan completed the top 10.
The Governor’s Office said the latest ranking follows what Ivey has described as a record year for economic development in 2025, when companies announced $14.6 billion in new investments in Alabama and more than 9,000 new jobs.
Alabama Department of Commerce Secretary Ellen McNair said companies consider several factors beyond tax rates when deciding where to locate or expand.
“Alabama’s continued recognition by Area Development is a strong validation of the work we are doing to make our state an increasingly competitive place for investment and job creation,” McNair said. “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. Alabama has been making deliberate investments in each of those areas, and these rankings reflect that progress.”
According to the Governor’s Office, about $300 million has been invested in industrial site development around Alabama in recent years.
“Our economic development strategy is focused on delivering what companies need to succeed — from preparing industrial sites and strengthening workforce pipelines to maintaining a competitive cost structure and working closely with our local partners,” McNair said. “The result is an Alabama that is positioned to compete for the major investments shaping the future of manufacturing, aerospace, automotive, technology and other high-growth industries.”
Workforce also played a significant role in Alabama’s rankings. The state placed fifth nationally for workforce training programs and eighth for access to skilled manufacturing labor. It received the No. 1 ranking for labor cost competitiveness.
Alabama Industrial Development Training Executive Director Kevin Taylor said workforce preparation remains closely tied to the state’s economic development efforts.
“Alabama’s competitiveness isn’t just about low taxes or incentives. It’s rooted in our people,” Taylor said. “The economic development success we’ve seen is directly tied to our ability to prepare Alabama citizens for the jobs employers need to fill. A strong workforce development program like AIDT gives companies confidence that they can find the skilled workers to scale operations, meet production schedules, and maintain quality as they grow.”
Area Development covers corporate site selection, facility planning and economic development. Its 2026 report said the highest-ranking states generally combined workforce availability, infrastructure, available industrial sites, government responsiveness and operating costs rather than relying on a single factor.
