Alabama Business™
Established in 1930, each issue contains a quarterly update of the economic forecasts for Alabama.
Economic Outlook Update:
Alabama Business | September 2026
- Alabama’s economy, as measured by inflation adjusted Gross Domestic Product (GDP) grew by 2.4 percent during the first quarter of 2026 totaling approximately $264 billion, following a 0.1 percent growth seen in the previous quarter. The state’s economy is expected to grow by about 2.0 percent in 2026, at approximately the same pace as 2025.
- The State lost 14,800 jobs in July from the previous month, bringing the total net gain in jobs to 20,400 from July 2025 to July 2026, while the seasonally adjusted unemployment rate rose from 2.8 percent to 3.4 percent. Employment is expected to grow by about 0.5 to 1.0 percent in 2026, following a 0.3 percent increase seen in 2025.
- During the twelve-month period ending in July 2026, seasonally adjusted number of unemployed workers increased from 66,983 to 79,345 while the labor force participation rate went down slightly from 57.5 percent in July 2025 to 56.9 percent in July 2026.
- For the first ten months of the current fiscal year, State’s total tax revenues increased by 2.7 percent to approximately $14.9 billion. For the same period sales tax receipts declined by 3.6 percent to about $2.5 billion while individual income tax revenues went up 7.7 percent, totaling approximately $6.4 billion. Total tax revenues are forecasted to increase by about 2.5 to 3.0 percent for FY2025-2026.
- For the first six months of 2026, Alabama exports totaled $11.1 billion, down from approximately $13.3 billion for the same period during previous year, a 16.5 percent drop. Transportation equipment remained state’s largest export, declining from approximately $7.0 billion during first six months in 2025 to $4.4 billion for the same period in 2026. Mexico was the largest destination for Alabama exports, totaling $2.3 billion for the first six months of 2026, followed by Canada ($1.7 billion), Germany ($1.2 billion), and China ($894 million).
- For the first six months of 2026, Alabama imports totaled approximately $19.2 billion, up from $17.7 billion for the same period during previous year. Imports from Mexico totaled $3.9 billion for the first six months of 2026, followed by South Korea (almost $3.0 billion), Canada and Germany (approximately $2.0 billion each), and China ($1.0 billion). Transportation equipment was the largest import ($6.4 billion), followed by primary metals ($2.2 billion), and electrical equipment and appliances ($1.7 billion).
- The US economy grew by 1.5 percent in the second quarter of 2026, following a 2.1 percent increase seen in the previous quarter, and is expected to grow by 2.3 percent in the third quarter. Increase in GDP in the second quarter was primarily due to increases in consumer spending, exports and investments. Consumer spending increased by 3.4 percent, with non-residential investment spending increasing by 8.5 percent. Residential investment spending rose 1.3 percent following a 7.8 percent decline seen in the previous quarter. U.S. economy is expected to grow by 2.1 percent in 2026 and 2.3 percent in 2027.
- U.S. inflation rate, as measured by consumer price index (CPI) rose by an annualized rate of 2.7 percent in 2025, forecast for inflation rate calls for a 3.2 percent increase in 2026.
- Total U.S. nonfarm payrolls were down by 23,000 in July while the unemployment rate remained unchanged at 4.1 percent. Monthly job gains have averaged 34,000 over the previous 12 months. Bothe retail trade and financial sectors lost jobs in July, 19,000 and 14,000 respectively. In July, employment in health care continued its upward trend (22,000) but at a slower pace than the average monthly gain of 36,000 over the prior 12 months. Employment showed little change over the month in other major industries.
