From the Chattanooga Times Free Press: Tennessee, which led the nation in economic growth in 2021, was displaced last year by Idaho as the state w
From the Chattanooga Times Free Press: Tennessee, which led the nation in economic growth in 2021, was displaced last year by Idaho as the state with the fastest-growing economy, according to estimates by the U.S. Bureau of Economic Analysis through the first three quarters of last year.
But the government agency said the Volunteer State ranked second among all U.S. states in gross domestic product growth in 2022, rising nearly 2 1/2 times as much as the rest of the country. In an analysis of the Bureau of Economic Analysis data, the nonprofit study group CivMetrics estimates Tennessee’s economy grew by 4.5% last year to a record $368.6 million of output.
“Tennessee is part of a pocket of states in the Southeast where the population is growing and the labor market is strong,” Ted Ballantine, director of CivMetrics, said in a telephone interview Tuesday. “These states are growing more, in part, because of strong immigration of younger people with college degrees and a strong job market where there are more job openings than can even be filled by the working population. Those things act as a cushion against broader headwinds like inflation and higher interest rates that everyone is facing.”
Tennessee’s population growth last year outpaced the nationas a whole, and in the fiscal year ended Sept. 30, the Tennessee Valley attracted the second-highest investment ever with more than $10.2 billion of new business growth announced last year.
After trailing the national average in economic growth in the previous three years, Tennessee led the nation in GDP growth in 2021, growing 8.6% to outpace the national average growth rate of 5.7%.
“There’s been a slower rate of growth across all states, but Tennessee remains a very bright spot among all states,” Don Bruce, director of the Boyd Center for Business and Economic Research at the University of Tennessee in Knoxville, said in a telephone interview Tuesday. “During and beyond the pandemic, a lot of folks have moved here, and many businesses have also decided to relocate here as well.”
Tennessee landed its biggest investment ever in late 2021 when Ford Motor Co. and LG Chem announced plans for a $5.6 billion electric vehicle and battery production complex in Stanton, just outside Memphis. To supply the new Ford facility and other plants, LG Chem announced last year it plans to build a $3.2 billion battery plant in Clarksville, Tennessee, that will add 860 jobs when in full production by 2025. The Clarksville announcement came 14 months after GM and LG Chem announced plans for a joint venture known as Ultium Cells to build a $2.3 billion battery plant in Spring Hill, Tennessee, that is projected to add 1,300 jobs.
Bruce said Tennessee continues to benefit from its location within a day’s drive of 60% of the U.S. population and its favorable energy prices, state and local taxes, and costs of doing business.
“With more remote workers able to live anywhere, we’re seeing an increase in migration to Tennessee from other higher-cost-of-living states,” Bruce said.
In its annual economic forecast, UT’s Boyd Center predictsTennessee will avoid a recession this yearand grow another 0.7% for all of 2023. Nationwide, the U.S. economy is projected to decline by 0.2% for all of 2023.
In 2022, the states with the biggest gains in gross domestic product growth were:
1. Idaho, up 5.7%.
2. Tennessee, up 4.5%.
3. Texas, up 4%.
4. Florida, up 3.5%.
5. Oregon, up 3.3%.
6. Colorado, up 3.2%.
7. North Carolina, up 3.2%.
8. New York, up 2.8%.
9. New Jersey, up 3.8%.
10. Utah, up 2.7%.
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FAQs
Overview of the Tennessee Economy
Tennessee's gross state product (GSP) in 2023 reached $375.8b, with growth of 20.6k% over the 5 years to 2023. Businesses in Tennessee employed a total of 3,279,765 people in 2023, with average annual employment growth over the past five years of 1913.9%.
What is Tennessee's main economy? ›
Agriculture is an important part of the economy of Tennessee, with the state ranking among the top producers of soybeans, tobacco, and cotton in the United States. The state is also home to a thriving healthcare industry, with Nashville being a major hub for healthcare services and research.
What is Tennessee ranked in the economy? ›
Tennessee is currently ranked 12th in the United States for its economic outlook. This is a forward-looking forecast based on the state's standing (equal-weighted average) in 15 important state policy variables. Data reflect state and local rates and revenues and any effect of federal deductibility.
What drives Tennessee economy? ›
Diverse and dynamic, the Tennessee economy boasts a gross state product of $375.8 billion. Industries like manufacturing and healthcare are growth pillars, while there are also plenty of opportunities in other sectors.
Is Tennessee the fastest growing state? ›
Tennessee landed in the top 10 states for both the highest population increase and fastest population growth rate. The Volunteer State ranked 6th for population increase (77,513) and 8th for fastest population growth rate (1.1%).
What is the fastest growing industry in Tennessee? ›
The fastest growing service industries with more than 1,000 employment include promoters of performing arts, sports, and similar events (14.2 percent) and other information services (12.3 percent), including Internet publishing and broadcasting and web search portals; data processing, hosting, and related services (4.9 ...
Why is Tennessee booming? ›
The growth in 2023 can largely be attributed to the region's migration patterns as 706,266 people were added via net domestic migration, while net international migration contributed almost 500,000 to the total."
What are the top 3 economic states? ›
Overall, in the calendar year 2023, the United States' Nominal GDP at Current Prices totaled at $27.360 trillion, as compared to $25.744 trillion in 2022. The three U.S. states with the highest GDPs were California ($3.8 trillion), Texas ($2.56 trillion), and New York ($2.15 trillion).
What city makes the most money in Tennessee? ›
Here are the Top 20 highest-earning cities in Tennessee:
- Brentwood.
- Germantown.
- Collierville.
- Signal Mountain.
- Farragut.
- Lakeland.
- Arlington.
- Franklin.
Tennessee is the thirty-fifth-richest state in the United States of America, with a per capita income of $28,764 (2017).
According to the 2023 report, the top 1% of earners in Tennessee are making at least $535,000 per year. If you want to be a fraction of that, studies say you should at least make $220,000 a year — and that's just to be included in the top 5%.
What is Tennessee good at? ›
Non-agricultural growth has boosted Tennessee's economy in recent years, with the manufacturing and mining, logging and construction industries experiencing strong growth. Tourists in Tennessee flock to the Great Smoky Mountains National Park, which welcomes more than 10 million visitors annually.
Is Tennessee in debt? ›
In the fiscal year of 2022, Tennessee's state debt stood at about 7.59 billion U.S. dollars. Comparatively, the state's debt was approximately 3.29 billion U.S. dollars in 2000.
Does Tennessee have a strong economy? ›
Tennessee's economic outlook is more favorable than the national outlook, thanks to an influx of new residents which is driving economic growth and business formation. The state's population grew by 1.2% between 2021 and 2022, greatly outpacing the nation's 0.4% growth.
What does Tennessee sell the most? ›
Top Five Agricultural Exports, Estimates, FY 2022
| RANK | EXPORT | VALUE MIL $ |
|---|
| 1st | Cotton | 956.6 |
| 2nd | Distilled Spirits | 817.7 |
| 3rd | Bakery Goods, Cereals, & Pasta | 261.9 |
| 4th | Forest Products | 185.4 |
2 more rowsThe growth in 2023 can largely be attributed to the region's migration patterns as 706,266 people were added via net domestic migration, while net international migration contributed almost 500,000 to the total."
Which state has the fastest economic growth? ›
Strongest State Economies in 2023
| Rank | State | Real GDP Growth 2023 YoY |
|---|
| 1 | North Dakota | +5.9% |
| 2 | Texas | +5.7% |
| 3 | Wyoming | +5.4% |
| 4 | Alaska | +5.3% |
7 more rowsApr 11, 2024
The state of Idaho experienced the most significant growth in real GDP in 2022, growing 4.9 percent when compared to 2021. Tennessee and Florida also experienced growth at or more than four percent.
