Tennessee jobs slowly are returning after a lost decade in the Volunteer State, according to a new economic forecast this week.
PDF: Economic report to the governor
After Tennessee shed nearly 20,000 jobs from 1999 through 2009, the state's top economic forecaster predicts it will add nearly a quarter of a million jobs over the next decade.
Outside of Chattanooga and a few other cities, however, manufacturing employment is likely to continue to shrink and job growth will be less than half the pace of most of the past half century.
"While economic conditions are showing marginal improvement, the Tennessee economy is stuck in a deep hole," University of Tennessee economist Matt Murray said in the annual economic report to the governor by the Center for Business and Economic Research. "Unemployment is a lagging indicator, so even though the recession is over we expect the statewide unemployment rate to stay in the double digits through next year."
The past decade is the first since the 1930s to show a net loss in jobs in Tennessee. Most of the decline has come from what Dr. Murray calls "the Great Recession" that began in 2007.
From its peak in 2007, Tennessee has lost 157,430 jobs, or nearly 6 percent of the state's employment. Only education and health care grew in the past couple of years. More than one-third of the job losses -- 57,120 positions -- were in manufacturing.
In metropolitan Chattanooga, the recession cost 12,300 jobs in the past two years, or 4.9 percent of all jobs, according to the U.S. Bureau of Labor Statistics. At the end of 2009, the number of jobs in Chattanooga was 238,300, unchanged from where it was a decade earlier.
But the jobless rate was twice as high because the city's population grew during the decade and more people now are looking for work.
In the Chattanooga area, the addition of Volkswagen and its suppliers -- combined with planned investments by Alstom Power, Westinghouse and Wacker Chemical -- should boost employment growth above the rest of Tennessee, Dr. Murray said.
Mark Campbell, owner of the Manpower franchise in Chattanooga, said he already is seeing a pickup this year in hiring from building contractors and suppliers to Volkswagen.
Mr. Campbell points to the economic gains in Spartanburg, S.C., from the BMW plant and in Columbus, Ga., from the nearby Kia plant. Each of those areas reports more than 10,000 jobs related to the auto plant and related suppliers.
"We're going to do better in Chattanooga," he said.
Volkswagen announced Tuesday that it has hired the first 22 production workers for its new plant. Volkswagen plans to employ 2,000 workers at its vehicle assembly plant, and at least 800 other jobs are planned at area VW suppliers.
Nonetheless, factory employment across Tennessee -- even in the automotive sector -- is expected to continue to decline, Dr. Murray said. The closing of the General Motors plant in Spring Hill, Tenn., and the shutdown of dozens of automotive suppliers across the state could offset the gains from VW and its suppliers.
"Manufacturers continue to do more with less, and we've seen a continual decline in manufacturing employment, even in relatively good times," Dr. Murray said.
Employment in business services, health care, trade and transportation should pace the jobs recovery, the report predicts.