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US State economic profile
Alabama - Economic Profile
Statistics, economic information and rankings for the Yellowhammer State
In 2026, the state of Alabama has a population of 5,236,995, having grown an annualized 0.7% over the five years to 2026, which ranks it 19th out of all 50 US states by growth rate. Alabama's gross state product (GSP) in 2026 reached $264.4b, with growth of 2.5% over the 5 years to 2026. Businesses in Alabama employed a total of 2,185,205 people in 2026, with average annual employment growth over the past five years of 1.8%. The top three sectors by total employment are Manufacturing, Real Estate & Rental & Leasing, Professional, Scientific & Technical Services, while the unemployment rate across the state in 2026 was 3.5%.
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State economic profile
Alabama Economic Overview
$264.4b
Gross state product
5,236,995
Population
371,388
Businesses
What is Alabama's Gross Domestic Product (GDP)?
In 2026, Alabama's GDP reached $264.4b, representing an increase of 2.5% from 2025. Alabama's GDP has grown at an annualized rate of 2.1% over the five years to 2026. Moreover, Alabama's trailing five-year GDP growth ranks it 17th out of all 50 US states.
State GDP, or Gross State Product, is a measurement of a state's output, or the sum of value added from all industries in the state. It is a common indicator used to track the health of a state's economy.
You can track trends in Alabama's GDP, and compare them to the national average, using the chart below.
State economic profile
Alabama Industry Trends
Learn about current trends affecting the most significant industries for Alabama's state economy, down to the county level. IBISWorld offers state industry research reports on over 30,000 industries across all 50 states in the US, including 638 industries in Alabama.
What are Alabama's Largest Industries by Revenue?
The largest industries by revenue in Alabama are Drug, Cosmetic & Toiletry Wholesaling, Commercial Banking and Automobile & Light Duty Motor Vehicle Manufacturing, which generated $29.8b, $23.3b and $23.0b in 2026.
| Industry | 2026 revenue | |
|---|---|---|
| 1. | Drug, Cosmetic & Toiletry Wholesaling | $29.8b |
| 2. | Commercial Banking | $23.3b |
| 3. | Automobile & Light Duty Motor Vehicle Manufacturing | $23.0b |
| 4. | Health & Medical Insurance | $19.3b |
| 5. | Hospitals | $19.0b |
| 6. | Electric Power Transmission | $18.3b |
| 7. | New Car Dealers | $17.3b |
| 8. | Warehouse Clubs & Supercenters | $13.0b |
| 9. | Private Equity, Hedge Funds & Investment Vehicles | $12.3b |
| 10. | Pharmacies & Drug Stores | $10.5b |
State economic profile
Top Companies in Alabama
Learn about current trends affecting the top companies in Alabama. IBISWorld offers benchmarking data and tools on over 5,000 companies in the US.
Top 10 Companies Headquartered in Alabama by Employment
The largest companies by employment in Alabama are University Of Alabama At Birmingham, Redstone Arsenal and Walmart, which employed 53,000, 50,000 and 41,948 people in 2026.
| Company | 2026 employment | Share of employment | |
|---|---|---|---|
| 1. | University Of Alabama At Birmingham | 53,000 | 2.4% |
| 2. | Redstone Arsenal | 50,000 | 2.3% |
| 3. | Walmart | 41,948 | 1.9% |
| 4. | Huntsville Hospital | 19,500 | 0.9% |
| 5. | Auburn University | 13,000 | 0.6% |
| 6. | Maxwell Airforce Base | 12,700 | 0.6% |
| 7. | Amazon.Com | 9,200 | 0.4% |
| 8. | Mobile County Public School | 7,200 | 0.3% |
| 9. | Home Depot, inc. | 6,139 | 0.3% |
| 10. | United States Postal Service | 5,930 | 0.3% |
State economic profile
Alabama Sector Statistics
In Alabama, certain sectors drive a higher share of state GDP and employ more workers than others. However, simply looking at raw numbers doesn't always tell the whole story. Factoring in the current year growth percentage, in addition to the annualized growth percentage over the past five years, will give you a deeper understanding of the economic situation.
What is Alabama's GDP by Sector?
The Manufacturing, Real Estate & Rental & Leasing and Professional, Scientific & Technical Services sectors contributed the most to Alabama's GDP in 2026, representing a combined 43.8% of state GDP.
GDP trends by sector are an important indicator of which sectors are contributing the most value-add to the state economy, in addition to how the state economy is evolving over time.
| Sector | GDP | Growth 2026 | Annualized growth 2021-26 |
|---|---|---|---|
| Manufacturing | 44,334,885,422 | 3.1% | 3.3% |
| Real Estate & Rental & Leasing | 32,162,106,698 | 3.3% | 3.5% |
| Professional, Scientific & Technical Services | 23,423,212,571 | 7.3% | 7.7% |
| Healthcare & Social Assistance | 21,318,984,704 | 3.8% | 3.9% |
| Retail Trade | 19,250,660,755 | 4.0% | 3.3% |
| Finance & Insurance | 13,084,353,549 | 1.0% | -0.5% |
| Wholesale Trade | 12,579,755,064 | -0.8% | -1.5% |
| Construction | 9,027,162,770 | -1.9% | -2.8% |
| Information | 8,504,820,815 | 8.1% | 8.0% |
| Administration, Business Support and Waste Management Services | 8,117,830,742 | 3.9% | 4.0% |
| Utilities | 7,444,278,062 | 3.6% | 3.9% |
| Accommodation & Food Services | 7,331,264,603 | 3.3% | 2.9% |
| Transportation & Warehousing | 6,261,356,951 | -0.0% | -0.9% |
| Other Services (except Public Administration) | 5,264,809,437 | -1.3% | -0.6% |
| Management of Companies and Enterprises | 3,413,212,861 | 5.9% | 6.5% |
| Agriculture, Forestry, Fishing & Hunting | 2,197,618,479 | -1.2% | -1.5% |
| Mining | 1,656,002,973 | -1.0% | 0.9% |
| Arts, Entertainment & Recreation | 1,507,115,471 | 11.7% | 12.7% |
| Educational Services | 1,387,304,253 | 2.7% | 3.6% |
What is Alabama's Employment by Sector?
The Healthcare & Social Assistance, Retail Trade and Manufacturing sectors contributed the most to employment in Alabama in 2026, representing a combined 38.9% of state employment.
Employment trends by sector are an important indicator of which sectors are growing or contracting most rapidly relative to the state economy as a whole.
| Sector | Employment | Growth 2026 | Annualized growth 2021-26 |
|---|---|---|---|
| Healthcare & Social Assistance | 298,028 | 1.7% | 1.8% |
| Retail Trade | 284,177 | 1.3% | 2.4% |
| Manufacturing | 267,359 | 0.6% | 1.3% |
| Accommodation & Food Services | 201,665 | 1.7% | 3.2% |
| Administration, Business Support and Waste Management Services | 189,630 | 1.2% | -0.1% |
| Professional, Scientific & Technical Services | 158,977 | 1.7% | 1.8% |
| Construction | 133,409 | 1.5% | 2.0% |
| Transportation & Warehousing | 122,312 | 3.9% | 3.6% |
| Other Services (except Public Administration) | 105,629 | 1.7% | 3.4% |
| Finance & Insurance | 99,476 | 1.0% | 1.1% |
| Educational Services | 84,265 | -1.7% | -0.7% |
| Wholesale Trade | 78,595 | 0.7% | 1.4% |
| Real Estate & Rental & Leasing | 57,476 | 0.5% | 0.9% |
| Information | 39,601 | 2.6% | 5.0% |
| Arts, Entertainment & Recreation | 26,790 | 0.8% | 3.2% |
| Utilities | 19,790 | 0.8% | 1.0% |
| Agriculture, Forestry, Fishing & Hunting | 12,421 | 0.5% | -0.7% |
| Mining | 5,605 | 0.2% | 0.5% |
State economic profile
Alabama Employment Trends
2.2m
Employment
3.5%
Unemployment
What Employment Trends are Impacting Alabama?
The state of Alabama employs 2,185,205 people in 2026, which ranks it 26th out of all 50 US states. Employment in Alabama has grown at an annualized rate of 1.8% over the five years to 2026, overperforming the national average of 1.7%. Major sectors by employment in Alabama include Healthcare & Social Assistance, Retail Trade and Manufacturing, which employed 298,028, 284,177 and 267,359 people in 2026, respectively. Alabama's unemployment rate is 3.5% in 2026, which ranks it 9th out of all 50 US states. Alabama's unemployment rate has trended upwards at a rate of 1.2% over the five years to 2026, overperforming the US economy as a whole.
Employment trends indicate the degree of tightness or slack in labor markets, in addition to the overall strength of an economy. Faster employment growth typically indicates a strong and growing economy, while lower unemployment tends to imply tightness in labor markets.
You can track unemployment trends in Alabama, and compare them to the US economy, using the chart below.
$84.5k
Per capita disposable income
What is Alabama's Per Capita Disposable Income?
Per capita disposable income, also known as disposable personal income (DPI), is the amount of money that the average person in an economy has available for spending and saving after accounting for income taxes. Alabama's DPI in 2026 was $84.5k, compared to the US average of $156.5k, which places it 38th out of all 50 US states.
Disposable income is regarded as a key economic indicator as trends in disposable income are indicative of the level of aggregate demand, the state of labor markets and the financial strength of households.
You can track trends in Alabama's per capita disposable income, and compare it to the US average, using the chart below.
State economic profile
Alabama Construction & Building Trends
$9,761.1tn
Nonresidential construction
$5.1tn
Residential construction
16,039
Building permits
What can construction trends tell you about a state’s economy?
In Alabama, non-residential construction was $9,761.1tn in 2026, which ranks it 29th out of all 50 US states. Residential construction was $5.1tn in 2026, which places Alabama 26th out of all 50 US states. The number of building permits issued in Alabama in 2026 was 16,039, representing a -4.9% annualized growth rate between 2021 and 2026.
Trends in the construction sector are important because it creates jobs, income and tax revenue for a state. In addition, construction sector activity impacts other sectors in its supply chain, including manufacturing, wholesaling, warehousing, transportation, and real estate, rental and leasing services. Therefore, construction trends are important indicators of the health of an economy.
You can track trends in the number of building permits issued in Alabama, and compare it to trends in the number issued in the United States as a whole, using the chart below.
State economic profile
Alabama Population Statistics
Which Counties in Alabama have the Largest Populations?
The counties with the highest populations in Alabama are Jefferson County, Madison County and Mobile County, which had populations of 654,267, 437,240 and 409,979 people in 2026.
| Region | 2026 population | Annual growth 2021-26 | Share of population |
|---|---|---|---|
| Jefferson | 654.3k | -0.4% | 12.5% |
| Madison | 437.2k | 1.9% | 8.3% |
| Mobile | 410.0k | -0.1% | 7.8% |
| Baldwin | 275.1k | 2.7% | 5.2% |
| Tuscaloosa | 242.4k | 0.7% | 4.6% |
| Shelby | 242.0k | 1.3% | 4.6% |
| Montgomery | 221.8k | -0.5% | 4.2% |
| Lee | 191.4k | 1.5% | 3.7% |
| Morgan | 127.4k | 0.6% | 2.4% |
| Limestone | 126.1k | 3.2% | 2.4% |
| Calhoun | 117.2k | 0.2% | 2.2% |
| Houston | 109.8k | 0.4% | 2.1% |
| Marshall | 104.1k | 1.1% | 2.0% |
| Etowah | 103.5k | 0.1% | 2.0% |
| St. Clair | 99.8k | 1.5% | 1.9% |
| Lauderdale | 99.5k | 0.9% | 1.9% |
| Cullman | 95.8k | 1.4% | 1.8% |
| Elmore | 93.0k | 0.9% | 1.8% |
| Talladega | 81.3k | 0.1% | 1.6% |
| Dekalb | 73.6k | 0.5% | 1.4% |
| Walker | 64.8k | N/A | 1.2% |
| Autauga | 62.0k | 0.9% | 1.2% |
| Blount | 60.6k | 0.5% | 1.2% |
| Colbert | 59.4k | 0.6% | 1.1% |
| Russell | 58.8k | N/A | 1.1% |
State economic profile
Alabama Demographics
In Alabama, 31.5% of the population has a Bachelors or higher. The largest ethnic group in Alabama is White, accounting for 63.1% of the state's population.
Education level in Alabama
| Education level | Share (%) |
|---|---|
| Bachelors or higher | 31.5 |
| Other | 68.5 |
Race in Alabama
| Race | Share (%) |
|---|---|
| White | 63.1 |
| Black | 25.9 |
| Hispanic | 6.6 |
| Other | 2.6 |
| Asian | 1.8 |
Alabama State industry reports
IBISWorld State Industry Reports help you quickly understand how an industry performs at the state level compared with the national level, with accurate and unbiased industry information with a local focus. Use this collection to:
- Discover key local industry trends
- Identify threats and opportunities at the subnational level
- Inform your business strategies and planning
See our list of 638 Alabama industry reports.
Other states to explore
Compare Alabama’s economy with other states in the United States.
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