Alabama Business™
Established in 1930, each issue contains a quarterly update of the economic forecasts for Alabama.
Economic Outlook Update:
Alabama Business | June 2026
- Alabama’s economy, as measured by inflation adjusted Gross Domestic Product (GDP) grew by 0.1 percent during fourth quarter of 2025 totaling over $262 billion, following a 4.7 percent growth seen in the previous quarter, first quarter 2026 rate of growth is expected to be around 1.5 to 2.0 percent. The state’s economy is expected to grow by about 1.8 percent in 2026 following a 2.0 percent growth in 2025.
- The State gained 2,800 jobs in March from the previous month, bringing the total net gain in jobs to 11,200 from March 2025 to March 2026, while the seasonally adjusted unemployment rate dropped from 3.0 percent to 2.7 percent. Employment is expected to grow by about 0.2 percent in 2026, following a 0.3 percent increase seen in 2025.
- During the twelve-month period ending in March 2026, seasonally adjusted number of unemployed workers dropped from 70,862 to 65,474 while the labor force participation rate went down slightly from 57.7 percent in March 2025 to 57.5 percent in March 2026.
- For the first seven months of the current fiscal year, State’s total tax revenues increased by 3.8 percent to approximately $10.6 billion. For the same period sales tax receipts declined by 0.8 percent to about $1.8 billion while individual income tax revenues went up 10.2 percent, totaling approximately $4.4 billion. Total tax revenues are forecasted to increase by about 2.5 to 3.0 percent FY2025-2026.
- For the first three months of 2026, Alabama exports totaled $5.1 billion, down from approximately $6.7 for the same period during previous year, a 22.5 percent drop. Transportation equipment remained state’s largest export, declining from approximately $3.5 billion during first three months in 2025 to $1.8 billion for the same period in 2026. Mexico was the largest destination for Alabama exports, totaling $1.1 billion for the first three months of 2026, compared to about the same amount during first three months of 2026 followed by Canada ($801 million), Germany ($434 million), and China ($343 million).
- For the first three months of 2026, Alabama imports totaled approximately $9.4 billion, up from $9.2 billion for the same period during previous year. Imports from Mexico totaled $1.9 billion for the first three months of 2026, followed by South Korea ($1.5 billion), Germany ($986 million), Canada ($842 million), and China ($598 million). Transportation equipment was the largest import ($3.3 billion), followed by electrical equipment and appliances ($976 million), and primary metals ($926 million).
- The US economy grew by 2.0 percent in the first quarter of 2026, following a 0.5 percent increase seen in the previous quarter, and is expected to grow by 1.8 percent in the second quarter. Increase in GDP in the first quarter was primarily due to increases in investments, exports, and consumer and government spending. Consumer spending increased by 1.6 percent, spending on services rose 2.4 percent while expenditures on durable goods remained flat and spending on nondurable goods actually declined. with spending on nondurable goods rising 3.9 percent. Nonresidential investment spending rose by 10.4 percent while residential investments dropped by 8.0 percent. U.S. economy is expected to grow by 2.0 percent in 2026 and 1.8 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 4.0 percent increase in 2026.
- Total nonfarm payrolls were up by 115,000 in April while the unemployment rate remained unchanged at 4.3 percent. Monthly job gains have averaged 76,000 in the year to date, up from 10,000 during the same period in 2025. Most of the jobs were added in healthcare (37,000), the sector has averaged 32,000 over the previous 12 months. Other sectors to add jobs were transportation and warehousing (30,000), retailing (22,000), and social assistance (17,000). Over the course of the year, employment is expected to grow by around 0.2 percent, compared to 0.5 percent growth seen in 2025.
