Magnolia House owner Lisa Booten kicked off Christmas season earlier this year with a holiday open house at the Thompson Lane store. She hopes sales will pick up during the holiday season, because 4th quarter sales make up one-third of her annual sales.
Rutherford County’s economy may be stabilizing, said David Penn, director of MTSU’s Business & Economic Research Center.
“But really we need to get into this fiscal year to see,” he said.
In the first quarter of the fiscal year, Rutherford County and city of Murfreesboro permits and fees are fairly level with 2008, but revenues are still substantially lower than 2007.
Rutherford County Building Codes Director David Jones said single-family building permits saw a brief up-tick in August, but both September and October saw declines.
County building permits for the year may stabilize at 2008’s level, but it’s too soon to tell, he said.
Murfreesboro saw an increase in July, but August and September single-family building permit requests trended back downward.
Penn credits the first-time homebuyer tax credit for the increase in single-family homes, but on the flip side, multi-family dwelling permits are still dropping.
“They are funded from the commercial lending market and that is suffering right now,” Penn said.
Other leading indicators like manufacturing and hours worked are also on the rise, he said.
Factory workers are putting in more hours on the job, averaging around 42 hours per week in the Nashville-Murfreesboro area.
“That’s up from 40 hours a year ago,” Penn said, adding paying overtime gets expensive for employers, so the next step is to “hire more temporary workers or permanent workers.”
This may be a good sign for Tennessee and Rutherford County’s dire unemployment rate.
The state’s unemployment rate has been stable over the last few months and even dropped a little to 10.5 percent in September.
Rutherford County’s September unemployment rate was 9.5 percent, which is comparable to the national average and down from a high of 11 percent in June.
But that may not be good news.
“You want unemployment to rise because of hiring not because people have stopped looking for work,” Penn said.
And Rutherford County has lost around 7,000 since last year with job losses concentrated in construction and manufacturing.
The high unemployment rate has also affected local sales tax revenues with the state, county and city coming in under budget.
Sales tax is heavily impacted by household spending, which is down substantially because of low consumer confidence and an unstable job market, Penn said.
“Nationally (consumer confidence) is plunging and showing signs of concern about the economy,” he said, adding that sales tax revenues are improving but it’s a lagging indicator.
While sales tax revenues may be improving, state sales tax revenue is still $60 million below projections in the first quarter. The city is about $500,000 under and the county is on track for a $1.5 million annual deficit.
Each of the governments even set the bar low, expecting shrinking income this year.
“The problem with annualizing the sales tax at this point, is that last year the reductions in sales tax collections began around December, so the nearly 6 percent reduction should level out,” Rutherford County Finance Director Lisa Nolen said.
Penn also sees the economy picking up more steam around the beginning of 2010.
“We may see improvement after the first of the year,” he said “Around January we may have seen the worst of it.”
Michelle Willard can be contacted at 615-869-0816 or firstname.lastname@example.org.