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 nation as 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%.