State's economy heading downhill, speaker says

David A. Penn speaks at last week's conference. (T-G Photo by John I. Carney) [Click to enlarge] [Order this photo]

MURFREESBORO -- Tennessee saw an economic downturn in the months of May through July, according to figures discussed Friday by David A. Penn, of Middle Tennessee State University's Business and Economic Research Center.

Penn spoke at MTSU's annual Economic Outlook Conference, held at the Embassy Suites Hotel and Conference Center in Murfreesboro.

Non-farm employment growth dropped by 0.4 percent for the state during that three-month period, while unemployment rose by 2.1 percentage points to a total of 6.6 percent. Housing construction dropped by a staggering 45.1 percent, while retail sales slipped by 0.6 percent.

Penn noted that a year ago, Tennessee was doing better than the U.S. in housing construction.

Nashville/Davidson County and the counties immediately surrounding it, known as the Nashville metropolitan statistical area or MSA, are suffering, but in some areas are not doing as badly as Bedford County and the rest of the state.

One area where the Nashville MSA is suffering is foreclosures. Bedford County, according to a map distributed by Penn, has one of the higher foreclosure rates in Middle Tennessee, along with Rutherford, Davidson, Maury and Sumner counties.

As of the second quarter of 2008, Tennessee had 7.87 percent of mortgages past due, compared to a U.S. adverage of 6.42 percent.

Lincoln and Moore counties are doing better than their southern Middle Tennessee neighbors in unemployment rates and in foreclosure filings.

"What is keeping Moore County afloat?" asked Penn. "Whiskey." He noted that Jack Daniel Distillery is seeing strong export sales to Germany. He said that a Middle Tennessee Industrial Development Association report suggests that distilleries and wineries are a possible focus for future development.

In general, states like Tennessee which relied in automobile manufacturing and similar industries saw a decline in employment. The great plains, and states with economies based on natural resources, saw much less of a decline.

Retail spending in Tennessee dropped in many categories, although dining out and miscellaneous retail showed modest increases compared to last year.