Crisp White


1
2006
Economic Overview Tennessee and Shelby County
Dennis Wilson Ph.D. Sparks Bureau of Business
and Economic Research/ Center for Manpower
Studies The University of Memphis
2
Summary for Tennessee
Positive Factors
1. Nissan corporate move to Tennessee. 2. Northw
est Tennessee Regional Port project should bring
job growth to high unemployment area. 3. Positive
U.S. economic growth will encourage Tennessee
economic growth. 4. Tennessee has little risk of
a housing bubble in contrast to East and West
Coast locations. 5. Site Selection Magazine ranks
Tennessee 5th in best business climate.
3
Summary for Tennessee
Negative Factors

• Outsourcing continues rural county loss of
  manufacturing jobs closing of Saturn Ion
  assembly line undereducated work force unable to
  compete with lower-cost foreign competitors.
• Weak support for higher education hinders states
  ability to compete in global economy.
• High unemployment rates in rural counties and
  throughout all of West Tennessee will be
  difficult to reduce.

4
Summary for Tennessee
Negative Factors

• The financial status of the state is being
  challenged by
• Cost of health care
• Influx of Katrina evacuees
• Cold winter and higher natural gas prices
• The budget crises is one down-year away
• 5. Highly uneven job growth across the state

5
U.S. Total Non-farm Employment1995 2005 (000)
U.S. Total Non-farm Employment1995 2005 (000)
TN Total Non-farm Employment1995 2005 (000)
6
Tennessee Unemployment by County October 2005
Unemployment Rate
3.5-4.4 4.5-5.0 5.1-7.0 7.1-10.0 10.1
-13.3
Map Sparks Bureau of Business and Economic
Research The University of Memphis. Source
Tennessee Department of Labor and Workforce
Development.
7
Tennessee Counties Versus National Unemployment
Rate October 2005
8
Tennessee Counties Versus National Unemployment
Rate October 2005
Unemployment Rate
October National Rate4.6 October State Rate5.3
At or below national rate Greater than national
rate
Not seasonally-adjusted. Map Sparks Bureau of
Business and Economic Research The University of
Memphis. Source Tennessee Department of Labor
and Workforce Development.
9
Revenue for Tennessee

• The 545 million growth in accrual year
  collections recorded for 2004-2005 was the State
  of Tennessees fourth largest increase since
  1970.
• This would be the first year that Tennessee state
  government collects more than 10 billion from
  these sources of funds.

10
Summary for Shelby DeSoto and Crittenden
Counties

• Positive Factors
• Local businesses are doing well
• Hino Motors in Arkansas
• Bodine Aluminum in Jackson
• Memphis Bio-Tech sector St. Jude Medtronic
  Sofamor Danek
• FedEx and AutoZone

11
Summary for Shelby DeSoto and Crittenden
Counties

• Positive Factors
• University of Memphis is an asset to the area.
  Future of the city depends on skilled jobs and an
  educated work force. Providing more services for
  minority students than ever in its history.
• 3. Memphis is highly unlikely to experience the
  ill effects of a housing bubble.

12
Summary for Shelby DeSoto and Crittenden
CountiesSource LWIA 13
13
Housing Price Growth ComparisonTN-MS-AR and
Selected Other Selected Markets(Source National
Association of Realtors Third Quarter Survey)
14
Summary for Shelby DeSoto and Crittenden
Counties

• Negative Factors
• Local influx of people from hurricanes shifted
  balance of charitable giving as people
  re-directed their giving leaving existing
  institutions to struggle.
• 2. High energy prices challenge Northwest
  Airlines FedEx UPS and other energy
  intensive businesses.
• High energy costs (increases of 50.0 percent or
  more) will exhaust available funds for assistance
  leaving those in poverty with a choice between
  cold and eating.
• 3. Underfunding of education at all levels is one
  of the highest threats to state and local
  education.

15
Summary for Shelby DeSoto and Crittenden
Counties

• Negative Factors
• 4. Construction industries particularly housing
  have been a
• bright spot in the local economy. Rising
  interest rates
• which increase the cost of investments in
  housing
• commercial and industrial construction and
  durable goods
• investment will not be good for our economy.
• 5. The combination of two basic tax sources
  sales and
• property is threatened by the steady
  dispersion of the
• population and economic base.