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Local Economic Conditions

Local Economic Conditions Rutherford County Home Builders Association Business and Economic Research Center Jennings A. Jones College of Business David A. Penn, Director November 18, 2004 Overview Uncertainty Improved in the spring Uncertainty is now increasing Major Factors

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Local Economic Conditions

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  1. Local Economic Conditions Rutherford County Home Builders Association Business and Economic Research Center Jennings A. Jones College of Business David A. Penn, Director November 18, 2004

  2. Overview • Uncertainty • Improved in the spring • Uncertainty is now increasing • Major Factors • Muddled consumer and business confidence • Energy prices • Inconsistent employment growth • Rising interest rates

  3. Consumer and Business Confidence Interest rate outlook Iraq war Terrorism Confidence? Earnings outlook Aging of the population Energy prices Job outlook Consumer debt Investment spending

  4. Consumer Confidence Confidence down for the 3rd straight month; 12% lower than in July.

  5. 15% price increase could cost Rutherford households $13.6 million this year. Gasoline Prices

  6. Indicators for the Local Economy • Nonfarm employment • Unemployment rate • Taxable sales • Housing and real estate

  7. Indicators for the Local Economy • Nonfarm employment • Unemployment rate • Taxable sales • Housing and real estate

  8. Rutherford County • Payroll employment grew 7.3% March 2003-04 • Second highest employment growth rate among 315 largest counties in the U.S. • Fourth highest December 2002-03 (4.6%) • Sixth highest growth June 2002-03

  9. Nashville MSA Payroll Employment Employment has improved beyond its pre-recession peak. August data

  10. Modest job growth: Nashville MSA up by 1.0%, Tennessee up 0.6% Sept. from year ago. Nonfarmemployment

  11. Payroll Employment Growth Rutherford growth very fast paced.

  12. Construction Employment Growth

  13. Manufacturing Employment Growth

  14. Indicators for the Local Economy • Nonfarm employment • Unemployment rate • Taxable sales • Housing and real estate

  15. Unemployment rate Unemployment rates September 2004 (2003) U.S. 5.1% (5.8%) Tennessee 3.8% (4.8%) Nashville MSA 3.8% (4.6%) Memphis MSA 6.0% (6.5%) Davidson County 3.9% (4.7%) Rutherford County 3.6% (4.6%) Williamson County 2.8% (3.0%)

  16. Indicators for the Local Economy • Nonfarm employment • Unemployment rate • Taxable sales • Housing and real estate

  17. Rutherford Taxable Sales Slower sales growth this year compared with 2003.

  18. Williamson and other counties are also experiencing slower sales growth. Rutherford & Williamson

  19. Taxable Sales by County (Percent change over year ago)

  20. Tennessee Taxable Sales by Category

  21. Indicators for the Local Economy • Nonfarm employment • Unemployment rate • Taxable sales • Housing and real estate

  22. Residential Building Permits Third Quarter 2003-04 • U.S.: + 7.5% • Tennessee: +16.2% • Nashville MSA: +15.7% • Rutherford County: +17.1%

  23. Rutherford County Housing Units • Added more housing units in 2003 than six states. • Rutherford County ranked in top 100 U.S. counties in housing unit growth for 2003 – Census Bureau

  24. Realty Transfer Tax Collections Activity slowed statewide and in the MSA.

  25. Real Estate Transactions Still very strong in Rutherford County

  26. Realty Transfer TaxSept 2003-04 • Tennessee: -0.3% • Nashville MSA: -13.9% • Rutherford County: +55.9%

  27. Interest Rates Upward pressure on interest rates.

  28. Expectations • Continuing gradual recovery of the U.S. economy. • Gradually rising short-term rates. • Inflation may become more of a concern. • Sustained growth in Europe, Canada, and Mexico would be helpful.

  29. U.S. Markets • Gently rising mortgage rates (up 0.5 in 2005) • Housing starts down 7% in 2005, 8% in 2006 • Mortgage originations down 15% in 2005, 7% in 2006 • Refinancings down 40% in 2005, 23% in 2006 • Source: Mortgage Bankers Assoc.

  30. Expectations for Rutherford County • Choppy taxable sales growth. • Continued strong employment growth. • Slower rate of growth of real estate activity.

  31. Business and Economic Research Center Jennings A. Jones College of Business • Publications • Data • Contract Research • Outreach

  32. Publications • Tennessee’s Business - Professor Horace Johns • Election 2004 (forthcoming) • People Who Keep State Government Running • Tennessee Lottery

  33. Publications • Global Commerce - Professor Steven Livingston • China Takes the Stage • Free Trade Agreements • Trade Wars

  34. Publications • Midstate Economic Indicators • Issued quarterly • Second quarter in print

  35. Business and Economic Research Center David Penn, Director dpenn@mtsu.edu 615-904-8571

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