Sunny skies have been forecasted for the 2013 economic climate in the Volunteer State, based on newly released data.
Gone is the hustle and bustle of the holiday season, but numbers from last December are now making an appearance.
Judging from the month-over-month and year-over-year comparisons, 2012 in Middle Tennessee ended on a high note that should carry over into 2013.
MTSU’s Business and Economic Research Center pointed to several indicators of the state’s steady improvement in its most recent edition of “Tracking Tennessee’s Economic Recovery.”
According to the report, state sales tax climbed 5.1 percent in December over the year after seasonal adjustment. This is the largest increase since June 2012.
Additionally, seasonally adjusted initial claims for unemployment insurance in Tennessee fell sharply in December to 5,504 from 6.942 in November. The state’s unemployment rate held steady at 7.6 percent in November and December; however, that number is down from 8.2 percent in October. This is the lowest Tennessee unemployment rate since October 2008. Rising employment pushed the unemployment rate lower, the report states. Seasonally adjusted nonfarm employment for Tennessee rose again in November, to the highest level in 2012.
Looking back on 2012, Williamson and Rutherford counties created jobs faster than nearly all other large counties in the United States, according to a recent report from the U.S. Bureau of Labor Statistics.
“For the first quarter of 2012, Williamson County payroll employment rose 5.6 percent over-the-year, ranking second fastest among the 329 largest counties in the United States,” David Penn, director of MTSU’s BERC, in an October 2012 County Wages and Payroll report. “Rutherford County payroll employment rose 5.3 percent, ranking third highest.”
He added, “More recent figures for Tennessee from the current unemployment statistics program show that employment growth slowed in the second and third quarters of 2012.”
Construction employment increased in 139 out of 337 metropolitan areas between December 2011 and December 2012, declined in 131 and was stagnant in 65, according to a new analysis of federal employment data released today by the Associated General Contractors of America. Association officials noted that growing private sector demand for new construction projects boosted employment in a slight plurality of metro areas.
“Private sector demand for energy, health care, higher education and residential construction is having a positive impact in a growing number of metro areas,” said Ken Simonson, the association’s chief economist.
“Unfortunately, construction employment in almost as many metro areas appears to be suffering from declining public sector demand and a private sector market that is still well-below peak levels.”
Construction employment in Nashville-Davidson--Murfreesboro--Franklin, Tenn. metropolitan statistical area showed a 2 percent increase from December 2011 to December 2012.
Association officials noted that construction employment is benefiting from a growing demand for construction, driven primarily by the private sector. They added that the rebounding housing market and relatively strong demand for health care, energy and higher education facilities boosted construction-spending levels by more than 7 percent for the year through November. But officials cautioned that construction spending was still more than $300 billion below peak levels amid declining public sector activity and weaker demand for office, retail and lodging.
“Contractors in some areas appear confident enough about market conditions to begin adding staff,” said Stephen E. Sandherr, the association’s chief executive officer. “The question is whether private sector demand will continue to grow in 2013 or stall as it has done in prior years.”
Home Sales in the Greater Nashville area, which includes Rutherford County, closed December 2012 with a 21.1 percent increase as compared to December 2011.
Fourth quarter closings are 6,657 for Greater Nashville. That total is up 30.7 percent from the 5,093 closings during the fourth quarter of 2011. Final numbers for 2012 show there were 26,097 homes sold in the region, according to figures provided by the Greater Nashville Association of Realtors. Compared to the prior year, the final figures are up 26.5 percent. There were 20,624 closings in 2011.
“December home sales were up more than 20 percent over December 2011, and for the ninth consecutive month, over 2,000,” said GNAR President Price Lechleiter. “Single-family residential closings alone this month exceeded the total closings for all categories combined in December 2011. And, for the first time since 2007, year-end home sales numbers surpassed 26,000.
Lechleiter explained how the Greater Nashville and Middle Tennessee real estate market is showing healthy signs of recovery and is “something our region shouldn’t take for granted.”
“The same growth is not necessarily being experienced in other parts of the state and nation,” he continued. “Our diverse economy, progressive local and regional leadership and even the TV show, Nashville highlight our city and create a positive spirit and outlook. That results in both businesses and families being attracted here.”
All nine counties in GNAR’s primary service area experienced significant increases in home sales, with many of them exceeding 20 percent for the year. And, modest increases in residential median prices were a clear trend throughout the region.
Steven Dotson, president of Rutherford County-based Red Realty, said he’s seeing big improvements from years past, but added, “we still have more ground to gain in order to catch up to the 2005/2006 levels.”
“Some predict we’ll be back to the peak levels by mid 2014 while others say 2017. I’ll take either prediction as both ranges state that we will see steady improvements over the next two to five years,” he said. “2012 was a big year for our industry. Let’s hope that 2013 brings the same activity and good news!”
Permits issued for new single-family homes climbed to an annual rate of 13,200 during the third quarter last year, the highest level since the tax-incentive-fueled fourth quarter of 2009, according to BERC’s Penn.
“Single-family home permits are 15.5 percent higher over the year, with 5.5 points of this gain occurring in the third quarter, meaning the rate of growth is accelerated,” he wrote in the most recent edition of Tennessee Housing Market Brief, a production of MTSU’s BERC.
Penn also noted that permits for multi-family housing structures, including townhouses, apartments and condos, fell during the third quarter to 4,900 from 5,400 the previous quarter.
“Taxes collected on both mortgages and real estate transfers rose in the third quarter, reflecting increased financing activity and a modest gain in the value of real estate transactions,” Penn stated.
Mortgage tax collections are up 13.9 percent from the previous quarter and 40.3 percent over the year, while taxes on real estate transfers are 1.2 percent highest from the second quarter and up 16.8 percent over the year.
“The housing market and manufacturing are at the leading edge of the Tennessee economy right now, a somewhat surprising development,” he said. “Construction of single-family homes continues to rise, but from very low levels, and home sales are gaining in two of the three largest metropolitan markets in the state, generating much-needed tax revenue for the state government.”