Job growth expected in Tennessee
Posted: Monday, January 31, 2011 8:01 pm
By TRAVIS LOLLER
NASHVILLE (AP) — Unemployment in Tennessee is expected to go down next year but not recover its pre-recession level until 2014.
That’s according to an annual economic forecast produced for the governor by the Center for Business and Economic Research at the University of Tennessee.
The report calls 2010 a “roller coaster,” with initial economic progress slowing midyear only to pick up again toward the end. The third quarter produced a year-over-year gain in employment and the unemployment rate fell to 9.4 percent by the close of 2010. The year wasn’t great, but it was a far cry from the possible 11 percent some were predicting at the end of 2009.
The report projects an unemployment rate of 9.1 in 2011 and 8.8 in 2010. It warns that the unemployment rate will remain above its pre-recession low through the end of the decade.
There are several reasons for that. For one, many people “in Tennessee and across the country will remain ’structurally unemployed’ because their skill set does not match the requirements of employers,” according to the report.
“Ongoing economic restructuring means the emergence of new products and services along with new jobs and occupations. Many of the jobs in greatest demand today simply did not exist 10 years ago within Tennessee.”
The state will also face the challenge of absorbing large numbers of discouraged workers — those who have dropped off the unemployment rolls because they have quit looking for work — and underemployed workers, along with the usual new entrants into the work force.
Most components of the state economy are expected to see job growth this year and the next.
Professional and business services, education and health services are expected to realize the strongest rate of job growth over the long-term horizon.
Leisure and hospitality services and trade, transportation and utilities should see job growth accelerate in 2012 as the economy stabilizes further.
Manufacturing over the next three years will see its first annual back-to-back jobs gains since the late 1990s, but by 2014 manufacturing employment will revert to its long-term downward trend. Despite the projected job losses, manufacturing output is expected to expand because of gains in productivity.
The report also found that taxable sales will not fully rebound until at least fiscal year 2014 and housing starts may not fully rebound even by the end of the decade.
CBER’s report to the governor: http://cber.bus.utk.edu/tefslist.htm
Published in The Messenger 1.31.11