Chattanooga among fastest growing cities coming out of the recession

Chattanooga among fastest growing cities coming out of the recession

June 24th, 2014 by Dave Flessner in Business Around the Region

Aerial view of downtown Chattanooga.

Photo by Doug Strickland/Times Free Press.

RATING THE CITIES

From 2009 to 2012, NerdWallet rates the top performing cities:

• 1. McAllen, Tex.

• 2. Midland, Tex.

• 3. San Angelo, Tex.

• 4. Fargo, N.D.

• 5. Bryan, Tex.

• 6. Chattanooga

• 7. College Station, Tex.

• 8. Odessa, Tex.

• 9. Edinburg, Tex.

• 10. Amarillo, Tex.

BEST METRO AREAS FOR GROWTH

From 2013 to 2020, IHS Global projects the fastest growing metro areas will be:

• 1. Austin, Tex.

• 2. Raleigh, N.C.

• 3. Fayetteville, Ark.

• 4. Riverside, Calif.

• 5. Duram, Chapel Hill, N.C.

• 6. Orlando, Fla.

• 7. Bakersfield, Calif.

• 8. Phoenix, Ariz.

• 9. Houston, Tex.

• 10. McAllen, Tex.

Chattanooga was among the top American cities for job growth coming out of the recession, but since 2012 the Scenic City has not been adding jobs at the pace of most cities and has yet to regain all of the jobs it lost during the economic downturn.

Those are the conclusions of a pair of studies released in the past week comparing and predicting the growth of cities since the 2008-2009 Great Recession.

A comparison of 510 cities by the financial online advisory service NerdWallet released Monday rated Chattanooga as the 6th best city for economic growth from 2009 to 2012.

Chattanooga's annual unemployment rate fell from 9.5 percent in 2009 at the depths of the recession to only 7.5 percent in 2012. In the same period, median household income grew in Chattanooga by 13.5 percent and median home values rose 14 percent, according to census bureau and labor department reports.

Chattanooga was the only Southeast city among the top 10 ranked in the recession recovery index. Eight of the top 10 cities were in Texas and the other top 10 city was Fargo, N.D. Most of the fastest growing cities like Chattanooga were mid-sized cities.

"The energy boom certainly helped some areas and other cities improved a lot because they were hit so hard during the recession that they were able to bounce back more than others that didn't get hit as hard," Sreeker Jasthi, an analyst for NerdWallet, said Monday. "Mid-sized cities also tended to do better than big cities in this period."

Chattanooga's growth was propelled in the past five years by the addition of three of the biggest business investments in the country -- the $1 billion Volkswagen plant in Chattanooga with more than 2,000 jobs announced in 2008, $145 million of distribution warehouses by Amazon.com in Chattanooga announced and nearby Charleston with more than 3,000 jobs announced in 2010, and the $2 billion Wacker polysilicon plant near Charleston, also announced in 2010 an slated for completion next year with more than 600 permanent jobs.

But Chattanooga's employment growth has been stunted, to some extent, in the past couple of years by job cuts at Alstom Power, the Tennessee Valley Authority and Farley & Sathers, among others.

A study of U.S. metropolitan areas by IHS Global Insight for the U.S. Conference of Mayors predicts Chattanooga's metro economy will grow by 1.8 percent this year and 1.9 percent last year. Those rates are below the projected U.S. growth pace of 2.0 percent this year and 3.2 percent next year.

In 2013, IHS estimates Chattanooga's economy grew 0.9 percent, or less than half the national growth pace of 2 percent.

Nashville is growing the fastest of any metro area in Tennessee and the third fastest of any metro area in the country, behind only Austin, Tex., and Silicon Valley, Calif.

IHS estimates Nashville's economy grew at a 4.2 percent pace last year -- twice the U.S. pace and four and a a half times faster than the growth in metro Chattanooga.

From its peak in early 2008, metro Chattanooga shed 23,400 jobs during the recession. Since the recession low in the summer of 2009, Chattanooga has added back nearly 15,000 jobs but remains a seasonally adjusted 8,500 jobs short of the employment peak reached six years ago.

Last month was the first month in which the United States as a whole regained all of the 8.7 million jobs lost during the Great Recession.

According to the National Bureau of Economic Research, the recession officially ended in June 2009. But according to the U.S. Bureau of Labor Statistics, it took nearly five years to make up for all of the recession-induced job losses nationwide. At the current pace, Chattanooga may be another couple of years before it regains all the jobs it shed during the economic downturn.

Contact Dave Flessner at dflessner@timesfree press.com or at 757-6340.