"Midstate Economy Still Feeling the Pinch:
Unemployment Rate Still Low Despite Economy"
Daily News Journal (1/27/03)

By Laren Anderson / Staff Reporter of The Daily News Journal

Middle Tennessee’s economy is not likely to soon correct itself despite this year’s low jobless rate, according to an MTSU economic publication.

The Winter 2003 issue of Midstate Economic Indicators noted that unemployment fell to 4.2 percent in October from 5.2 percent in March. This rate triggered a modest increase of 0.1 percent in overall employment in Rutherford County and throughout the Middle Tennessee region, noted the quarterly publication issued through the Business and Economic Research Center at MTSU.

Unemployment in the midstate area of 41 counties totaled 4.3 percent in the third quarter of 2003, helping the midstate to weather economic conditions nagging the rest of the United States, which has 6 percent unemployment, the publication stated. It added that nearly six in 10 metropolitan areas throughout the nation reported job losses last year.

U.S. economic conditions, mainly in the manufacturing sector, must improve before the midstate economy again prospers, said David Penn, director of the Business and Economic Research Center. Penn said an increased national demand is needed before area manufacturers can increase production and hire more workers.

Nissan North America Inc. may partially correct economic damage in the manufacturing sector if the corporation employs additional workers to assemble the latest Nissan Maxima, Penn said.

To assemble the Maxima, the corporation will spend roughly $1 billion to extend its 5.4 million square-foot facility in Smyrna, said Frank Limpus, department manager of Public Relations at Nissan.

Limpus added production of the automobile would require the Smyrna and Decherd plants add 2,000 manufacturing jobs and 1,000 jobs with suppliers by 2004.

“It could have an impact on local suppliers,” Penn said. “That’s very good news.”

But automobiles assembled in the midstate have met fleeing year end sales after a normal summertime boom, the publication noted. It added that sales volumes descended to 146,422 during the third quarter of 2002, down from 160,771 during the second quarter of the year.

Despite this weakening, the periodical said consumer confidence in Rutherford County and throughout the midstate may be on the rise, resulting in “a robust Christmas” for retailers here.

The Middle Tennessee Consumer Confidence Index “rebounded sharply” in November, the periodical noted, rising to 286 from 227 the month before. MTSU marketing professor Tim Graeff compiled the index that traces local spending totals.

Spending continues in the residential construction sector, which the periodical stated has 3,896 construction permits during the third quarter of 2002, up from 3,780 in the previous quarter.

Penn said this 3.1 percent increase in residential construction is certainly beneficial to the Rutherford County and midstate labor market.

“The good news is that in the midstate labor market, the unemployment rate continues to fall,” he added.