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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
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
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
consumer and business confidence
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

consumer confidence
Consumer Confidence

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

indicators for the local economy
Indicators for the Local Economy
  • Nonfarm employment
  • Unemployment rate
  • Taxable sales
  • Housing and real estate
indicators for the local economy7
Indicators for the Local Economy
  • Nonfarm employment
  • Unemployment rate
  • Taxable sales
  • Housing and real estate
rutherford county
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
nashville msa payroll employment
Nashville MSA Payroll Employment

Employment has improved beyond its pre-recession peak.

August data

payroll employment growth
Payroll Employment Growth

Rutherford growth very fast paced.

indicators for the local economy14
Indicators for the Local Economy
  • Nonfarm employment
  • Unemployment rate
  • Taxable sales
  • Housing and real estate
unemployment rate
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%)

indicators for the local economy17
Indicators for the Local Economy
  • Nonfarm employment
  • Unemployment rate
  • Taxable sales
  • Housing and real estate
rutherford taxable sales
Rutherford Taxable Sales

Slower sales growth this year compared with 2003.

indicators for the local economy22
Indicators for the Local Economy
  • Nonfarm employment
  • Unemployment rate
  • Taxable sales
  • Housing and real estate
residential building permits third quarter 2003 04
Residential Building Permits Third Quarter 2003-04
  • U.S.: + 7.5%
  • Tennessee: +16.2%
  • Nashville MSA: +15.7%
  • Rutherford County: +17.1%
rutherford county housing units
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
realty transfer tax collections
Realty Transfer Tax Collections

Activity slowed statewide and in the MSA.

real estate transactions
Real Estate Transactions

Still very strong in Rutherford County

realty transfer tax sept 2003 04
Realty Transfer TaxSept 2003-04
  • Tennessee: -0.3%
  • Nashville MSA: -13.9%
  • Rutherford County: +55.9%
interest rates
Interest Rates

Upward pressure on interest rates.

expectations
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.
u s markets
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.
expectations for rutherford county
Expectations for Rutherford County
  • Choppy taxable sales growth.
  • Continued strong employment growth.
  • Slower rate of growth of real estate activity.
business and economic research center jennings a jones college of business
Business and Economic Research Center Jennings A. Jones College of Business
  • Publications
  • Data
  • Contract Research
  • Outreach
publications
Publications
  • Tennessee’s Business - Professor Horace Johns
  • Election 2004 (forthcoming)
  • People Who Keep State Government Running
  • Tennessee Lottery
publications34
Publications
  • Global Commerce - Professor Steven Livingston
  • China Takes the Stage
  • Free Trade Agreements
  • Trade Wars
publications35
Publications
  • Midstate Economic Indicators
    • Issued quarterly
    • Second quarter in print
business and economic research center
Business and Economic Research Center

David Penn, Director

dpenn@mtsu.edu

615-904-8571