Middle Tennessee continues to see solid economic growth despite a statewide unemployment rate that has remained the same for three months, said David Penn, a professor of economics at Middle Tennessee State University.
“(It’s) mostly good news. I really had to look for some bad news,” said Penn, who is also the director of the Business and Economic Research Center.
Penn was speaking to a packed crowd Friday at the MTSU Economic Outlook Conference, an annual event designed to examine the current outlook for the area.
The conference featured presentations on national economic policy, as well as an economic update for the region, from professors of economics and finance experts.
Middle Tennessee and the Nashville area are continuing to improve economically, although improvement across the overall state has slowed, Penn said.
The slow down in recovery is partially due to how reliant the Tennessee economy is on exports, and the financial issues that overseas trading partners have experienced.
“Depending on what happens with government employment, it’s conceivable Tennessee could reach recovery to pre-recession levels within about 12 to 18 months, at this rate of growth,” he said.
“(The) labor force (number) has hardly changed over the year,” he said. “What’s happening here is that folks are jumping back into the labor force after jumping out in 2010, when the participation rates dropped fairly significantly. They’re jumping back in, and the number of jobs is just barely growing enough to absorb them, keeping the unemployment rate almost unchanged over the year.”
As a result, the state’s unemployment rate has remained at 8.5 percent for the past three months.
Although statewide sales tax collections are only up by a little more than a percentage point, which, after inflation, basically constitutes zero growth, the housing sector is a “bright spot” on the Tennessee economy, with permits for housing up 32 percent, Penn said.
Additionally, a majority of the counties in the state that have the lowest unemployment rates are located in Middle Tennessee. Several of them, including Rutherford, are almost two points below the state average.
“Rutherford County, when you include both private and government jobs, ranks sixth highest in the country (for job growth),” Penn said, adding experts believe Rutherford County is likely to see a 7.7 percent job growth in the private sector, with it being 5.3 when government employment is considered.
“(The job growth statistics) are just reaffirming what we already knew,” said Rutherford County Mayor Ernest Burgess, who was attending the conference. “Middle Tennessee is the economic engine of all of Tennessee. Our counties are performing – job growth and sales tax collections and all of those things are above (average).”
“Every year, we’re way up there in some of these numbers, so we’re getting that kind of recognition annually,” Burgess added. “That’s another reason people keep selecting this county and the Middle Tennessee area to come to because they are fully aware of all the great things that are happening here.”
Additionally, the entire Nashville Metropolitan area, including the surrounding counties, ranks No. 1 nationally for job growth, at 4.5 percent – making Middle Tennessee one of the centers for job growth in the United States, Penn said.
The conference’s other two speakers focused on more national and international topics, covering the debt and deficit, as well as the importance of education, technology and investment and savings.
Keynote speaker David Darst, the managing director and chief investment strategist at Morgan Stanley, discussed solutions for the nation’s monetary policy and economic outlook. One major issue he identified was that savings and investment are in a serious decline, which prevents economic growth.
“We have to be investing as a country, and we have to be investing as individuals,” Darst said. “And we’re not. We’re on strike.”
Darst also pointed to the importance of good business policy at the state level, as well as the importance of technology and innovation, in addition to having an education system that supports those needs.
“This is what MTSU has,” Darst said, “which is No. 1, the relationship between the professor and the student, No. 2, the relationship between the professor and the venture capital firm, and No. 3, very important, the relationship between the professor and the angel investor… This is what’s in the genes, the DNA of this campus right here. And I urge, beg, plead, blandish and entreat you to continue fostering that.”
The morning speaker, Donald Ratajczak, a professor of economics emeritus at Georgia State University, spoke about what’s going on in the U.S. and global economies, touching on several topics, including the difference between the debt and deficit.
During his speech, Ratajczak referred to a recent survey showing that a majority of Americans believe the federal deficit is growing. However, he explained that although the debt is still growing, the deficit has shrunk.
“I’m going to tell you right now, the deficit is not growing,” he said. “The deficit is net addition to the debt. The debt clearly is growing. Any positive deficit grows the debt. The deficit last year was $1.12 trillion, but this year it will be $695 billion.”
Also, Joey Jacobs, an MTSU alumnus who is the chief executive officer of Acadia Healthcare, a behavioral health company, was presented with the Jennings A. Jones Champion of Free Enterprise Award at the conference.
“To be successful you have to lead people,” Jacobs said. “I found the best way for me to lead people was to work hard. You set an example by working hard and having fun. Find something you have fun at. It can be anything, just please have fun.”