In 2024, Alabama ranks as the Most Improved State for Business in America, thanks to its growing workforce.

• The influx of new residents, particularly in tech-rich Northern Alabama, has expanded the workforce in the Yellowhammer State.
• The program in Alabama that connects businesses with prepared construction sites is one of the best in the nation.
• Despite progress in some areas, the state continues to face significant challenges related to inclusiveness, voting rights, and health.

James Morgan, a real estate broker from Huntsville, Alabama, has worked in various locations across the country and globally. Currently, he states that he would prefer to be in Northern Alabama, and his clients seem to share the same sentiment.

Our clients hail from Pennsylvania, Colorado, Michigan, and California, with a significant number of Michiganders visiting us. Thus, we anticipate considerable expansion.

The numbers bear that out.

In 2024, Alabama was ranked as the Most Improved State in CNBC's annual competitiveness study, America's Top States for Business, due to its improvement in net migration of college-educated workers from 49th in 2022 to 14th in 2024.

Alabama improves its ranking by 22 places to finish 20th overall in the CNBC rankings, mainly due to a 20-place increase in its Workforce rank, now tied with New Hampshire and Wisconsin. The Workforce category accounts for 15% of a state's total score, with metrics including migration and talent attraction, and Alabama ranks No. 14 in the talent attraction index developed by Lightcast.

Over the past decade, there has been a clear trend of people wanting to reside in the Southeast, according to Josh Wright, Lightcast's executive vice president for growth.

Huntsville, Alabama's growth engine is the area where Morgan and his wife Angie have been selling real estate for 20 years. This region is home to NASA's Marshall Space Flight Center, with over 7,000 employees, as well as major data centers for Facebook and Google. As a result, the population of metropolitan Huntsville has increased by 7% in just the past three years.

"Morgan stated that the Huntsville area boasts a high standard of living and is distinct from the rest of Alabama due to its melting pot nature, characterized by diversity and education."

Shovel-ready sites give companies room to grow

The improvement in the CNBC rankings for Alabama is not solely due to its expanding workforce.

The study in the Infrastructure category highlights new metrics on site readiness programs that connect prospective companies with certified, shovel-ready sites to build. Alabama's AdvantageSite program is one of the strongest in the nation, according to data compiled for CNBC by the Site Selectors Guild, an industry trade group.

The Economic Development Partnership of Alabama (EDPA) oversees a program that received $40 million in funding for site readiness last year. Currently, the EDPA has 60 active sites across the state. Each site must meet certain criteria, such as being at least 25 acres, being zoned for industrial use, having local government support, and either having utilities on site or a plan to obtain them.

Over the past 15 years, the organization has located 55 projects on its sites, with an investment of over $2.8 billion and the creation of more than 7,700 new jobs.

Improving its Infrastructure rating from No. 13 to No. 8 this year, Alabama implemented a strong site readiness program, which was not previously considered in the CNBC rankings.

Lack of education is a big workforce issue

Despite being the Most Improved State, Alabama still has room for improvement, according to the data.

Despite the growing workforce, Alabama still has one of the least educated workforces in the nation, with only 27% of adults aged 25 and above holding a bachelor's degree or higher, which is the seventh lowest in the country, according to the Census Bureau.

Some key metrics in the Quality of Life category are where the state struggles, particularly in terms of inclusiveness.

Out of only five states, including Alabama, Georgia, Mississippi, North Carolina, and Texas, there are no laws prohibiting discrimination in public accommodations for individuals with disabilities, according to the National Conference of State Legislatures. The Human Rights Campaign has accused Republican Governor Kay Ivey of a "systematic attack" against the LGBTQ+ community, with a series of laws she signed over the past two years.

The state has prohibited transgender athletes from competing according to their self-identified gender, mandated public schools and universities to designate restrooms based on "biological sex," and forbidden public school diversity, equity, and inclusion programs.

The Center for Election Innovation and Research states that Alabama is one of only three states that does not allow early voting.

According to the United Health Foundation, one of America's least healthy states is ranked No. 45 for primary care doctors, No. 49 for dentists, and last for mental health providers.

Sweet homes in Alabama real estate market

Despite the slowdown in other areas, the flow of people into Huntsville remains unabated.

Despite the real estate market not being as frenzied as it was a couple of years ago, Morgan stated that activity remains strong, even with high interest rates. Sellers are still making a profit, and out-of-state buyers, who make up about a quarter of his clientele, are finding they can get a lot for their money.

"People are pleasantly surprised when they see the infrastructure, growth, and arts and culture in our community," Morgan said. "With three major lakes and river sources, we offer a great standard of living and lifestyle that can be adapted if embraced."

If anything, he said, there are some growing pains.

"The number of permits and apartments being constructed currently is astonishing," he remarked. "I believe every time we drive around, we're losing a cotton field and it's now an apartment complex."

It is not a problem to have in America's Most Improved State for Business.