News Summary
Alabama has secured the 19th position in CNBC’s annual ‘Top States for Business’ rankings for 2025, marking its progress as the ‘most improved’ state from the previous year. Key improvements were noted in the workforce category, aided by enhanced training and development programs. Though Alabama excels in cost of living and workforce availability, it struggles with access to capital and education. Legislative efforts, including the ‘Powering Growth Act of 2025,’ aim to enhance the state’s infrastructure and overall business environment.
Alabama has climbed one spot to secure 19th place in CNBC’s annual “Top States for Business” rankings for 2025, as reported in the latest release on Thursday. This latest ranking marks a continuation of Alabama’s progress, following its designation as the “most improved” state for business in 2024.
The most notable improvement for Alabama came from an eight-place jump in the workforce category, which has drawn attention from economic observers. CNBC credits the state’s advancements to an increase in the availability of skilled labor and enhanced workforce development programs. This focus on developing a more skilled workforce aligns with ongoing efforts by Alabama’s state leaders to bolster labor force participation and readiness.
Additionally, Alabama made gains in the cost-of-living category, now standing at 6th nationally. This improvement highlights the state’s competitive advantages in affordability for both businesses and residents. Despite the positive trajectory in these areas, Alabama continues to face challenges, particularly in access to capital, where it ranks 40th, and in education, where it lags behind other states.
However, the state’s performance in the infrastructure category was concerning, experiencing a significant decline from 8th to 28th place this year. This drop raises questions about the state’s readiness to support business growth through adequate infrastructure development.
Ongoing legislative efforts, including the introduction of the Powering Growth Act of 2025, aim to address these issues directly. This act established the Alabama Energy Infrastructure Bank, a $1 billion financing initiative designed to modernize and expand the state’s energy grid. Funded initially with $50 million from the 21st Century Fund, the program also aims to direct at least 40% of its funding to rural areas by 2030.
In the CNBC report, Alabama received an overall score of 1,337, with most of its category grades ranging from C to B-plus. The state’s corporate tax rate remains competitive at 6.5%, alongside a maximum individual income tax rate of 5%. Furthermore, as of May 2025, Alabama has a 3.3% unemployment rate, indicating a relatively stable job market.
Despite significant strides in workforce development and tax competitiveness, quality of life issues remain a persistent challenge for Alabama. The state ranked 44th in this category, facing ongoing concerns related to healthcare access, high crime rates, and poor health outcomes. These factors can impact not only the general well-being of the residents but can also influence business decisions to relocate or expand operations within the state.
Consequently, Alabama’s continued efforts to improve education and business conditions are crucial to addressing these deficiencies. Lawmakers remain focused on enhancing the overall quality of life to create a more robust and attractive business environment.
The focus on developing and retaining a skilled workforce, alongside infrastructure improvements and economic incentives, demonstrates Alabama’s commitment to advancing its position within the competitive landscape of U.S. states for business. Moving forward, Alabama’s ability to tackle its existing challenges while fostering an empowering environment for businesses and residents will be essential for sustaining its momentum in future rankings.
Deeper Dive: News & Info About This Topic
- Alabama Reporter
- Wikipedia: Alabama
- Yellowhammer News
- Google Search: Alabama business rankings
- Alabama Daily News
- Google Scholar: Alabama business development
- Business Insider
- Encyclopedia Britannica: Alabama economy
- The Bama Buzz
- Google News: Alabama economy
Author: STAFF HERE BIRMINGHAM WRITER
The BIRMINGHAM STAFF WRITER represents the experienced team at HEREBirmingham.com, your go-to source for actionable local news and information in Birmingham, Jefferson County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as the Sidewalk Film Festival, Sloss Music & Arts Festival, Magic City Classic, and civil rights commemorations. Our coverage extends to key organizations like the Birmingham Business Alliance and the Birmingham Civil Rights Institute, plus leading businesses in healthcare, finance, and manufacturing that power the local economy such as UAB Medicine, Regions Bank, and Encompass Health. As part of the broader HERE network, including HEREHuntsville.com, we provide comprehensive, credible insights into Alabama's dynamic landscape.
