Alabama Experiences Surge in Small Business Activity

News Summary

A recent analysis by BILL indicates that Alabama, particularly Birmingham and Tuscaloosa, is experiencing substantial growth in small business activity. The study showcases a remarkable increase in business payments and highlights the migration of individuals to the region, spurred by favorable economic conditions. Other cities like Mobile, Montgomery, and Huntsville are also witnessing positive trends in business payments, reflecting a thriving entrepreneurial spirit within the state.

Alabama Reports Rapid Growth in Small Business Activity

A new analysis by BILL, a fintech platform, reveals that Alabama cities, particularly Birmingham and Tuscaloosa, are leading the nation in growth for small business activity. The study assessed commercial spending patterns in mid-sized and large cities across the U.S. during the year starting January 2025, highlighting significant developments in Alabama’s economic landscape.

Key Findings

Birmingham and Tuscaloosa have emerged as the fastest-growing cities in the United States for small business activity among a selection of 342 cities with populations exceeding 100,000. The analysis focused on businesses employing between two and 200 people and evaluated changes in accounts payable spending. Notably, mid-sized cities, characterized by populations between 100,000 and 499,000, are exhibiting a remarkable growth rate in small business activity that surpasses that of larger cities.

Regional Trends

The assessment highlights that the southern and western regions of the U.S. are experiencing the most rapid growth in business payments, with the South leading the charge. This surge in economic activity is partly attributed to an influx of residents. Since the COVID-19 pandemic, approximately 2 million people from other regions have moved to the South, enhancing the regional economy.

Migration Data

In 2022 alone, around 904,000 out of 2.1 million immigrants to the U.S. chose to settle in the South, drawn by factors such as a favorable climate, business-friendly governments, affordable housing options, and the rise of remote work opportunities. These elements have combined to make Alabama an attractive destination for both new residents and businesses.

Additional Alabama Cities Experience Growth

Other Alabama cities are also witnessing significant increases in business-to-business (B2B) payments. Mobile has recorded a staggering 437% increase in B2B payments since March 2020, with a consistent growth of 5% noted since January 2025. Additionally, Montgomery experienced a 50% increase in B2B payments post-2020, while Huntsville showed a 128% growth in payments during the same timeframe, further indicating a thriving small business sector across the state.

Background Context

The analysis by BILL provides insight into how Alabama’s economic environment is evolving, particularly in the realm of small businesses. The trend of increased payments reflects a burgeoning entrepreneurial spirit and highlights the resilience of these businesses in adapting to changes brought on by the pandemic and shifting economic conditions.

As small businesses continue to play a vital role in the U.S. economy, the positive growth reported in Alabama’s cities showcases the potential for further development, economic stability, and job creation in the immediate future. Community leaders and policymakers are encouraged by these trends and are likely to focus on fostering an environment that supports this ongoing growth.