KNOXVILLE, Tenn.– Tennessee’s economy has slowed much more than the nation’s or the Southeast’s for reasons not clearly understood by researchers at the University of Tennessee.
Dr. Matt Murray of the UT-Knoxville Center for Business and Economic Research said Thursday that Tennessee’s economy has slowed much more than other Southeastern states.
“It’s difficult to explain why Tennessee is performing so poorly relative to our neighbors in the Southeast and across the nation,” Murray said. “We don’t have a good explanation for it.”
For comparison, Tennessee’s growth in per capita income was twice the national average and first among Southeast states during the years 1985-93.
“In 1996, among the 50 states, we were fourth from the bottom,” Murray said. “That’s a dramatic change.”
Murray said the slowdown relates to several problems — a higher value on the dollar overseas, a weakening housing industry and sagging automobile sales — but none of the factors are unique to Tennessee.
“Those are problems that can have a significant impact on the manufacturing sector within the South,” Murray said. “They are not unique to Tennessee, but we have had much poorer job growth.”
The Tennessee employment picture is deteriorating to the point that the manufacturing job market has started to constrict, Murray said.
“We are actually losing jobs in manufacturing,” Murray said. “The services and trade sectors have showed a similar propensity to slow, but we still have growth in those areas.”
The economic slowdown has been felt in the Nashville and Middle Tennessee area, which outperformed the remainder of the state in job creation for the past five or six years, Murray said.
“The Nashville economy is cooling off quite significantly,” Murray said. “In 1994 and 1995 there was non-farm job growth in the range of 5 percent annually, but in 1996 job growth was up only 2 percent in the Nashville area.”
Contact: Dr. Matt Murray (423-974-5441)