Nashville job market slows down

A snapshot of job growth in Middle Tennessee to be released today by the Nashville Area Chamber of Commerce shows what most people in the job market already knew.

The 10-county area around Nashville has created far fewer jobs in the past year than it did in 2006-2007, and economists expect net gains in employment to slow even more before the economy brightens.

The region, including Davidson and Williamson counties, had a net increase of 5,241 jobs for the 12 months ended June 30, the chamber's study period. That's less than one-third of the jobs gained in the previous 12-month period when the national and local economies were much brighter. It's also well below the chamber's annual goal of adding 11,500 net new jobs here.

"We have to be realistic that we are operating in a national and global economy. We've never seen this combination of (economic) issues coming together at the same time," said Mack Holladay, president of Market Street Services, the Atlanta consulting firm that compiled the progress report for the chamber.

The full report will be released today by the chamber's economic development arm — known as Partnership 2010. Some Tennessee-based economists warn there's an even rougher six months to come.

"We're in a cycle downward now, and we haven't seen the bottom yet. We're seeing broadly based declines in employment, and other than health and education, there are no sectors continuing to grow at this moment across the state," said University of Tennessee economist Bill Fox.

"We will see flat or even negative performance over the next six months or so, but when the housing problem bottoms out along with the settling of the financial markets, I think we will begin to see some real economic growth again," Fox said.

If there is a bright spot to be found in the chamber's study, it may be that despite weaker job numbers overall, lots of people are still moving to Middle Tennessee from other parts of the state and nation. And some cities have experienced bigger job losses than the Nashville area has seen.

Memphis, for instance, lost at least 2,100 jobs in the 12-month period through June, federal data show.

"That shows we are holding our own in a very uncertain national economy," said Janet Miller, chief economic-development officer for the Nashville chamber. "While we would like to be creating 11,500 net new jobs each year, the fact that we fell short of the goal we had set underscores that Nashville is not immune to what is going on nationally."

Area attracts newcomers

Over the past two years, though, the 10-county population has added about 40,000 people a year — a sign that the Nashville area remains an attractive place to live, the chamber's study concludes.

"Clearly, the strength of Middle Tennessee, and Nashville specifically, is diversity," said Keith Herron, regional president of Regions Bank and co-chairman of Partnership 2010.

"A lot of things are working to our advantage in this difficult economic environment," he said. "Among them is our quality of life. This is a great place to live, work and play. People who have relocated their families here have found that."

One reason for continued population gains is that people are moving here from areas where the economy is a lot weaker, said David Penn, an economist at Middle Tennessee State University.

"We're going to continue to see this divergence between population and job growth because people are moving in from places where job growth is worse," he said.

Penn said not all new residents enter the job market. "We might be getting some retirees who have had enough of Florida's real estate market and weather," Penn said.

Eventually, the in-migration will slow if there are not enough jobs to support the new residents, said Mack Holladay, president and chief executive of Market Street Services, the Atlanta consulting firm that compiled the progress report.

Nashville is doing better than Memphis, Chattanooga and Knoxville, as well as Charlotte, N.C.

Areas that are outpacing Nashville in job growth and economic development include Austin, Texas, and Raleigh, N.C., Holladay said.

Relocations are strong

Another measure of the area's economic stature — corporate relocations — has shown strong performance, meeting the chamber's goals over a two-year period, Miller said.

"Fifty-one companies have moved their headquarters into the region in the past year, bringing an average of 66 jobs per company," she said. The largest was Verizon Wireless, which brought at least 700 jobs, she said. "But the smaller companies offer big impacts, too."

The key to Nashville's continued success will be to "strengthen the diversity of the economy," Holladay said. The region needs to continue its economic-development efforts and "get better at what you're doing" to attract jobs, Holladay said. "For goodness sake, don't slow down."

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