The Tennessee economy continues a trend of slow and steady growth primarily in urban centers. According to The Quarterly Business and Economic Indicators Report released by the Secretary of State’s Office more than 7,700 new businesses were filed from October to December 2015, a more than 7% increase from the same period last year. More than half of these were in the state's four largest counties: Davidson, Shelby, Knox and Hamilton, signaling an increase in urbanization.
Though new filings are on the rise, the state saw 11,760 annual reports filed, a 23% drop in the fourth quarter compared to the previous year. According to the report, this is typically the lowest quarter. Despite this drop, annual reports saw a nominal uptick in compared to 2014. Businesses closed in quarter four totaled 1,515. However, this is 14.7% less than the same time period in the previous year.
Dr. William Fox with the UT-Knoxville Center for Business and Economic Research says, "I think the thing that's true about the economy right now is that there's a big number of winners and a big number of losers in a relative sense."
Employment growth is evident in business services, private education and leisure and hospitality, he says. However, employment in the areas of construction and non-durable manufacturing are well below levels seven or eight years ago. In the retail sector, an ecommerce business may see growth in the double-digits, while brick and mortar stores were nearly stagnant at 1%, roughly the level of inflation.
Tax revenue is up nearly 10% driven largely by spending on goods and services with a 7% increase in sales tax and 48% increase in franchise and excise tax.
Unemployment dropped to 5.6% in December, close to where it was in June 2015 and higher than the national average (4.9% as of January 2016). January saw relatively slow employment growth (151,000 new jobs) compared to the monthly average in 2015 (228,000).
Retail gasoline prices are at the lowest levels in Tennessee since March 2009 (at $2.06 per gallon). Prices continue to fall, dropping just over 4% in January and down nearly 7% from a year ago.
Find the full report here, published by the Tennessee Secretary of State’s Office and the University of Tennessee Knoxville’s Center for Business and Economic Research.
