The ever-fluctuating stock market and unstable foreign economies can make Americans unsure about economic recovery, but recent data shows Middle Tennessee is pushing forward.
Signs are pointing to an increase in personal income, climbing retail sales and stability in both manufacturing jobs and unemployment rates, according to David Penn, director of the Business Economic Research Center at MTSU.
He presented data to local business professionals at the university’s 19th annual Economic Outlook Conference that offered figures and a forecast of hope for economic recovery.
Data from BERC also shows diffuse job growth in the Nashville Metro Service Area (MSA), which includes Rutherford County. An estimated 5.6 percent increase in professional and business services, or those from temp agencies, is an indicator that permanent employment is likely to increase in the near future, Penn continued.
Personal income has exceeded its pre-recession peak, and wages and salaries are growing but remain below peak levels. Sales tax is up 4.4 percent, which Penn says, “is not a bad figure.”
Additionally, construction is continuing to progress forward, with a 26.9 percent increase in single-family housing permits, data shows. This may seem like a huge jump, but Penn pointed out that the actual number of permits issued was only 87 more than last year.
Worth noting was the 0.6 percent increase in manufacturing. As labor costs increase for foreign plants and the price of fuel increases, as it is expected to, companies are finding it more suitable to manufacture items within the U.S., and Tennessee, for that matter.
“It looks better than it has in many years,” Penn said of the Tennessee manufacturing jobs.
Growth in Tennessee manufactured exports coupled with stability or growth in the auto sector has created a new stability in the state’s manufacturing sector. Employment in manufacturing has been very stable for the past two years, Penn said, with about 300,000 jobs in the state and approximately 60,000 in Nashville MSA.
He also noted that these jobs will not be the same types of manufacturing jobs as seen in the past. Rather, they will be more technology and skill-driven.
One cause for concern lies in health care industry growth, which has dipped below overall employment.
“Health care is the second industry in the state,” Penn said. “If health care gets a sneeze, the total economy could catch a cold.”
Also, with residents’ move back into the labor market, a sustained increase in robust employment growth to bring the unemployment rate down. He says this area will be the last to improve.
To become unstuck in this rut of slow recovery, Penn said the local economy would need improved confidence and an increase in spending, or demand, which would in turn prompt employers to hire more workers to meet the new demand.
Over the next year, residents should expect to see a slow, downward drift of unemployment claims, slight decrease in unemployment rate, and continued moderate growth in both non-farm employment and sales tax collections. Penn forecasted a mild rise in housing construction, but he said that Nashville MSA growth is predicated on moderate growth for the U.S. economy. |
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