UT report forecasts improving state economy through 2006
“The economy has finally been able to engineer sustained job growth that will help propel the state forward through next year,” said report author Matt Murray, associate director of UT’s Center for Business and Economic Research.
The report titled, the Tennessee Business and Economic Outlook, is an update to UT’s annual report to the governor in January. The positive outlook for Tennessee reflects the expectation of sustained growth in the national economy.
While the report notes that the U.S. economy has “cooled off some in recent quarters,” sufficient momentum remains to keep the economy on track well into next year. Rising interest rates and high energy prices are two of the obstacles the economy has overcome.
Personal income growth, considered by the authors as “one of the broadest measures of economic expansion for the state,” is expected to advance by 5.8 percent in 2005 and 5.7 percent in 2006.
Tennessee will experience “slightly stronger growth in per capita personal income than the nation in both 2005 and 2006,” according to the report.
Job growth in the state is projected to increase by 1.4 percent in 2005, the same rate as the year before. This means more than 37,000 new jobs for the state economy. Growth will be especially strong in the service sector. Tennessee’s unemployment rate is expected to average 5.7 percent in 2005.
Tennessee should see job growth in manufacturing in 2005. Although the gain may be slight, Murray noted, “This will be the first expansion in manufacturing jobs since 1998 and represents a modest turnaround.” Manufacturing accounts for about 15 percent of the jobs in Tennessee today compared to nearly 19 percent in 1998.
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On the Net:
UT report: http://cber.bus.utk.edu