AN ECONOMIC REPORT TO THE GOVERNOR OF THE STATE OF TENNESSEE

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1 AN ECONOMIC REPORT TO THE GOVERNOR OF THE STATE OF TENNESSEE Matthew N. Murray, Associate Director and Project Director Center for Business and Economic Research PREPARED BY THE Center for Business and Economic Research College of Business Administration The University of Tennessee Knoxville, Tennessee IN COOPERATION WITH THE Appalachian Regional Commission Tennessee Department of Finance and Administration Tennessee Department of Economic and Community Development Tennessee Department of Revenue and Tennessee Department of Labor and Workforce Development THE STATE S ECONOMIC OUTLOOK JANUARY2013

2 CONTRIBUTORS An Economic Report to the Governor of the State of Tennessee AUTHORS UT Center for Business and Economic Research Matthew N. Murray, Associate Director and Project Director William F. Fox, Director LeAnn Luna, Research Associate Professor of Accounting & Information Management Donald J. Bruce, Professor of Economics Vickie C. Cunningham, Research Associate William R. Hamblen, Research Associate Melissa O. Reynolds, Research Associate Ahiteme N. Houndonougbo, Graduate Research Assistant UT Department of Agricultural Economics Harwood D. Schaffer, Research Associate Professor, Agricultural Policy Analysis Center Daryll E. Ray, Blasingame Chair of Excellence Professor, Professor and Director of the Agricultural Policy Analysis Center PROJECT SUPPORT STAFF UT Center for Business and Economic Research Betty A. Drinnen, Administrative Specialist Carrie B. McCamey, Communications Coordinator Laura Ogle-Graham, Business Manager The preparation of this report was financed in part by the following agencies: the Tennessee Department of Finance and Administration, the Tennessee Department of Economic and Community Development, the Tennessee Department of Revenue, the Tennessee Department of Labor and Workforce Development, and the Appalachian Regional Commission. This material is the result of tax-supported research and as such is not copyrightable. It may be freely reprinted with the customary crediting of the source. UT Publication Authorization Number R ii 2013 TENNESSEE ECONOMIC REPORT

3 PREFACE This 2013 volume of An Economic Report to the Governor of the State of Tennessee is the thirtyseventh in a series of annual reports compiled in response to requests by state government officials for assistance in achieving greater interdepartmental consistency in planning and budgeting efforts sensitive to the overall economic environment. Both short-term, or business cycle-sensitive forecasts, and longerterm, or trend forecasts, are provided in this report. The quarterly state forecast through the first quarter of 2015 and annual forecast through 2022 represent the collective judgment of the staff of the University of Tennessee s Center for Business and Economic Research in conjunction with the Quarterly and s. The national forecasts were prepared by IHS Global Insight, Inc. Tennessee forecasts, current as of January 2013, are based on an array of assumptions, particularly at the national level, which are described in Chapter One. Chapter Two details evaluations for major sectors of the Tennessee economy, with an agriculture section provided by the University of Tennessee Agricultural Policy Analysis Center. Chapter Three discusses Tennessee s role in the international economy and presents the long-run outlook and forecast for the state. Chapter Four presents an update on the current state of affairs for electronic commerce and implications for sales tax policy and revenue performance. The primary purpose of this annual volume published, distributed, and financed through the Tennessee Department of Finance and Administration, Tennessee Department of Economic and Community Development, the Tennessee Department of Revenue, the Tennessee Department of Labor and Workforce Development, and the Appalachian Regional Commission is to provide wide public dissemination of the most-current possible economic analysis to planners and decision-makers in the public and private sectors. Matthew N. Murray Associate Director and Project Director Center for Business and Economic Research 2013 TENNESSEE ECONOMIC REPORT iii

4 CONTENTS CONTENTS EXECUTIVE SUMMARY... VIII CHAPTER 1: THE U.S. ECONOMY Introduction The U.S. Economy: Year in Review... 2 Components of GDP... 2 Inflation and Prices... 8 Labor market The U.S. Forecast Consumption and the Labor Market Investment and Interest Rates Federal Budget International Trade Inflation and Prices Alternative Scenarios Forecast Summary and Conclusion CHAPTER 2: THE TENNESSEE ECONOMY: SHORT-TERM OUTLOOK Introduction The Current Economic Environment Fiscal Update National Perspective Tennessee and the Southeastern States Short-Term Outlook Situation and Outlook for Tennessee Agriculture Overview of Agriculture in Tennessee Tennessee Agricultural Sector Outlook Ag Sector Issues and Opportunities CHAPTER 3: THE TENNESSEE ECONOMY: LONG-TERM OUTLOOK Introduction Tennessee s Place in the International Economy Exchange Rates Gains from Trade Trade Restrictions Free Trade iv 2013 TENNESSEE ECONOMIC REPORT

5 CONTENTS Foreign Direct Investment Labor Mobility Tennessee s Trade with the International Economy Total International Economic Activity Trade Balance Trade Partners Products Summary Long-Term Economic Outlook The Labor Market Income, Earnings and Output CHAPTER 4: TECHNOLOGY AND TAXES IN TENNESSEE Introduction and Overview Industry Trends Why E-Commerce is a Tax Problem Revenue Losses from E-Commerce State Strategies to Tax E-Commerce Federal Policy Developments Emerging Issues in Taxing E-Commerce Conclusion APPENDIX A: FORECAST DATA... 1 Quarterly History Tables... 2 History Tables APPENDIX B: HISTORICAL DATA Quarterly Forecast Tables Forecast Tables TENNESSEE ECONOMIC REPORT v

6 CONTENTS FIGURES AND TABLES CHAPTER 1: THE U.S. ECONOMY... 1 Figure 1.1. GDP Growing Slowly but Steadily... 3 Figure 1.2. Consumer Spending Continues to Grow and Confidence Hits Four-Year High... 4 Figure 1.3. Housing Market Begins its Rebound in Figure 1.4. Federal Deficit Tops $1 Trillion for Four Consecutive Years... 7 Figure 1.5. Timid Export and Import Growth Amid Global Uncertainties... 8 Figure 1.6. Unemployment Continues its Slow but Steady Decline Figure 1.7. Inflation-Adjusted GDP Expected to Pick up Steam Figure 1.8. Unemployment Rate Expected to Continue its Steady Decline CHAPTER 2: THE TENNESSEE ECONOMY: SHORT-TERM OUTLOOK Table 2.1. Index of State Economic Momentum, September Figure 2.1. Many Counties Continue to See Job Losses Despite Statewide Job Growth Figure 2.2. Tennessee s Monthly Unemployment Rate in the Middle of the Southeastern States Figure 2.3. Monthly Unemployment Rates Have Improved, But Remain Elevated Figure 2.4. Per Capita Income Shows Wide Variation Across Tennessee Figure 2.5. Building Permits Indicate a Housing Recovery is in the Works Figure 2.6. Tennessee Ranked Ninth in Light Vehicle Production in Figure 2.7. U.S. Housing Starts are Finally Enjoying a Meaningful Rebound Figure 2.8. Housing Price Indexes on the Rise Figure 2.9. Fiscal 2012 Surpassed 2011 and Peak 2008 U.S. State Tax Collections Figure Tennessee s Total Tax Collections Grew Fastest in the Southeast in Fiscal 2012 over Figure Monthly Total Tax Collections Mostly Above Peak Figure Quarterly Nonfarm Job Growth Stabilized in the Quarters Ahead Table 2.2. Selected U.S. and Tennessee Economic Indicators, Seasonally Adjusted Figure Most Sectors of the Tennessee Economy Expected to See Growth Figure Quarterly Unemployment Rates Expected to Improve Slowly Figure Leading Tennessee Commodities for Cash Receipts, vi 2013 TENNESSEE ECONOMIC REPORT

7 CONTENTS CHAPTER 3: THE TENNESSEE ECONOMY: LONG-TERM OUTLOOK Figure 3.1. Chinese Renminbi to U.S. Dollar Exchange Rate Figure 3.2. Tennessee s Share of Exports to GDP Higher Than the Nation s Share Figure 3.3. Tennessee s Share of Exports to GDP Falls in the Middle of the Southern States Figure 3.4. Tennessee Has a Large Import and Export Share of GDP Figure 3.5. China was Tennessee s Largest Source of Imports in Figure 3.6. Canada was Tennessee s Largest Export Market in Figure 3.7. Commodity Export Growth: Agricultural Products, Transportation Equipment, and Chemicals Figure 3.8. Nonfarm Job Growth, 2000 to Table 3.1. Selected U.S. and Tennessee Economic Indicators, Seasonally Adjusted Figure 3.9. Unemployment Rate, 2000 to CHAPTER 4: TECHNOLOGY AND TAXES IN TENNESSEE Figure 4.1. Recent Growth in Retail E-Commerce Figure 4.2. Summary of U.S. Shipments, Sales, Revenues, and E-commerce: Table 4.1. National Total State and Local E-Commerce and Revenue Losses Figure 4.3. Transaction Taxation APPENDIX A: FORECAST DATA... 1 Quarterly History Tables... 2 History Tables APPENDIX B: HISTORICAL DATA Quarterly Forecast Tables Forecast Tables TENNESSEE ECONOMIC REPORT vii

8 Forecast Data APPENDIX A APPENDIX A: FORECAST DATA In this section Appendix A: Forecast Data Quarterly pages 2 25 (2012:4 to 2015:1) pages (2012 to 2022) Quarterly Forecast Tables Table 1: Table 2: Table 3: Table 4: Table 5: Table 6: Table 7: Table 8: Table 9: Table 10: Table 11: Table 12: Table 13: Table 14: Table 15: Table 16: Table 17: Table 18: Table 19: Table 20: Selected U.S. and Tennessee Economic Indicators, Seasonally Adjusted...2 Selected Per Capita U.S. and Tennessee Economic Indicators, Seasonally Adjusted...4 Tennessee Personal Income Components, Seasonally Adjusted (millions of 2005 dollars)...5 Tennessee Personal Income Components, Seasonally Adjusted (millions of current dollars)...6 Tennessee Nonfarm Employment by Sector, Not Seasonally Adjusted (thousands of jobs)...7 Tennessee Durable Goods Manufacturing Employment, Not Seasonally Adjusted (thousands of jobs)...8 Tennessee Nondurable Goods Manufacturing Employment, Not Seasonally Adjusted (thousands of jobs)...9 Tennessee Nonfarm Employment by Sector, Seasonally Adjusted (thousands of jobs)...10 Tennessee Durable Goods Manufacturing Employment, Seasonally Adjusted (thousands of jobs)...12 Tennessee Nondurable Goods Manufacturing Employment, Seasonally Adjusted (thousands of jobs)...13 Tennessee Average Wage and Salary Rate by Sector, Not Seasonally Adjusted (2005 dollars)...14 Tennessee Average Wage and Salary Rate by Sector, Seasonally Adjusted (2005 dollars)...15 Tennessee Average Wage and Salary Rate by Sector, Not Seasonally Adjusted (current dollars)...17 Tennessee Average Wage and Salary Rate by Sector, Seasonally Adjusted (current dollars)...18 Tennessee Civilian Labor Force and Unemployment Rate, Not Seasonally Adjusted...20 Tennessee Civilian Labor Force and Unemployment Rate, Seasonally Adjusted...21 Tennessee Taxable Sales, Not Seasonally Adjusted (millions of 2005 dollars)...22 Tennessee Taxable Sales, Seasonally Adjusted (millions of 2005 dollars)...23 Tennessee Taxable Sales, Not Seasonally Adjusted (millions of current dollars)...24 Tennessee Taxable Sales, Seasonally Adjusted (millions of current dollars)...25 Forecast Tables Table 1: Table 2: Table 3: Table 4: Table 5: Table 6: Table 7: Table 8: Table 9: Table 10: Table 11: Table 12: Table 13: Table 14: Table 15: Selected U.S. and Tennessee Economic Indicators...26 Selected Per Capita U.S. and Tennessee Economic Indicators...27 Tennessee Personal Income Components (millions of 2005 dollars)...28 Tennessee Personal Income Components (millions of current dollars)...29 Tennessee Nonfarm Employment by Sector (thousands of jobs)...30 Tennessee Durable Goods Manufacturing Employment (thousands of jobs)...31 Tennessee Nondurable Goods Manufacturing Employment (thousands of jobs)...32 Tennessee Average Wage and Salary Rate by Sector (2005 dollars)...33 Tennessee Average Wage and Salary Rate by Sector (current dollars)...34 Tennessee Civilian Labor Force and Unemployment Rate...35 Tennessee Taxable Sales (millions of 2005 dollars)...36 Tennessee Taxable Sales (millions of current dollars)...37 Tennessee Gross Domestic Product by Sector (millions of 2005 dollars)...38 Tennessee Durable Goods Manufacturing Gross Domestic Product (millions of 2005 dollars)...39 Tennessee Nondurable Goods Manufacturing Gross Domestic Product (millions of 2005 dollars) TENNESSEE ECONOMIC REPORT 1

9 TENNESSEE ECONOMIC REPORT Table 1: Selected U.S. and Tennessee Economic Indicators, Seasonally Adjusted History Forecast Data 2012:2 2012:3 2012:4 2013:1 2013:2 2013:3 2013:4 2014:1 2014:2 2014:3 2014:4 2015: US GDP (Bil2005$) SAAR % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr US GDP (Bil$) SAAR % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr TN PERSONAL INCOME (MIL2005$) SAAR % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr US PERSONAL INCOME (BIL2005$) SAAR % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr APPENDIX A Forecast Data TN PERSONAL INCOME (MIL$) SAAR % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr US PERSONAL INCOME (BIL$) SAAR % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr TN NONFARM JOBS (THOUS) % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr US NONFARM JOBS (MIL) % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr TN MFG JOBS (THOUS) % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr US MFG JOBS (MIL) % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr TN UNEMPLOYMENT RATE (%) US UNEMPLOYMENT RATE (%) (CONTINUED ON NEXT PAGE)

10 Table 1: Selected U.S. and Tennessee Economic Indicators, Seasonally Adjusted History Forecast Data 2012:2 2012:3 2012:4 2013:1 2013:2 2013:3 2013:4 2014:1 2014:2 2014:3 2014:4 2015: CHAINED PRICE INDEX, GDP (2005=100.0) % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr US PERS CONSUMP DEFL (2005=100.0) % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr CONSUMER PRICE INDEX, ALL-URBAN (82-84=1.000) % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr BANK PRIME INTEREST RATE (%) FEDERAL FUNDS RATE (% per annum) YEAR FIXED MORTGAGE RATE (%) TN TAXABLE SALES (MIL2005$) % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr TN TAXABLE SALES (MIL$) % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr TENNESSEE ECONOMIC REPORT 3 TN AVG ANNUAL WAGE, NONFARM (2005$) % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr TN AVG ANNUAL WAGE, NONFARM ($) % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr Forecast Data APPENDIX A

11 TENNESSEE ECONOMIC REPORT Table 2: Selected Per Capita U.S. and Tennessee Economic Indicators, Seasonally Adjusted History Forecast Data 2012:2 2012:3 2012:4 2013:1 2013:2 2013:3 2013:4 2014:1 2014:2 2014:3 2014:4 2015: US GDP (2005$) SAAR % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr US GDP ($) SAAR % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr TN PERSONAL INCOME (2005$) SAAR % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr US PERSONAL INCOME (2005$) SAAR % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr APPENDIX A Forecast Data TN PERSONAL INCOME ($) SAAR % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr US PERSONAL INCOME ($) SAAR % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr TN TAXABLE SALES (2005$) % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr TN TAXABLE SALES ($) % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr

12 Table 3: Tennessee Personal Income Components, Seasonally Adjusted Rates (millions of 2005 dollars) History Forecast Data 2012:2 2012:3 2012:4 2013:1 2013:2 2013:3 2013:4 2014:1 2014:2 2014:3 2014:4 2015: TN PERSONAL INCOME % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr WAGES AND SALARIES % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr OTHER LABOR INCOME % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr PROPRIETORS INCOME % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr RENT, INTEREST, DIVIDENDS % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr TRANSFER PAYMENTS % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr LESS: PERS CONT FOR SOC INS % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr TENNESSEE ECONOMIC REPORT 5 RESIDENCE ADJUSTMENT % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr PER CAPITA PERSONAL INCOME ($) % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr Forecast Data APPENDIX A

13 TENNESSEE ECONOMIC REPORT Table 4: Tennessee Personal Income Components, Seasonally Adjusted Rates (millions of current dollars) History Forecast Data 2012:2 2012:3 2012:4 2013:1 2013:2 2013:3 2013:4 2014:1 2014:2 2014:3 2014:4 2015: TN PERSONAL INCOME % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr WAGES AND SALARIES % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr OTHER LABOR INCOME % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr PROPRIETORS INCOME % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr APPENDIX A Forecast Data RENT, INTEREST, DIVIDENDS % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr TRANSFER PAYMENTS % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr LESS: PERS CONT FOR SOC INS % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr RESIDENCE ADJUSTMENT % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr PER CAPITA PERSONAL INCOME ($) % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr

14 2013 TENNESSEE ECONOMIC REPORT 7 Table 5: Tennessee Nonfarm Employment by Sector, Not Seasonally Adjusted (thousands of jobs) 2012:2 2012:3 2012:4 2013:1 2013:2 2013:3 2013:4 2014:1 2014:2 2014:3 2014:4 2015: TOTAL NONFARM % Chg Same Qtr Last Yr NATURAL RESOURCES, MINING & CONSTRUCTION % Chg Same Qtr Last Yr MANUFACTURING % Chg Same Qtr Last Yr DURABLE GOODS % Chg Same Qtr Last Yr NONDURABLE GOODS % Chg Same Qtr Last Yr TRADE, TRANSPORTATION, UTILITIES % Chg Same Qtr Last Yr WHOLESALE TRADE % Chg Same Qtr Last Yr RETAIL TRADE % Chg Same Qtr Last Yr TRANSPORTATION & UTILITIES % Chg Same Qtr Last Yr INFORMATION % Chg Same Qtr Last Yr FINANCIAL ACTIVITIES % Chg Same Qtr Last Yr PROFESSIONAL & BUSINESS SERVICES % Chg Same Qtr Last Yr EDUCATION & HEALTH SERVICES % Chg Same Qtr Last Yr LEISURE & HOSPITALITY % Chg Same Qtr Last Yr OTHER SERVICES % Chg Same Qtr Last Yr GOVERNMENT % Chg Same Qtr Last Yr FEDERAL, CIVILIAN % Chg Same Qtr Last Yr STATE & LOCAL % Chg Same Qtr Last Yr History Forecast Data Forecast Data APPENDIX A

15 TENNESSEE ECONOMIC REPORT Table 6: Tennessee Durable Goods Manufacturing Employment, Not Seasonally Adjusted (thousands of jobs) History Forecast Data 2012:2 2012:3 2012:4 2013:1 2013:2 2013:3 2013:4 2014:1 2014:2 2014:3 2014:4 2015: TOTAL DURABLE GOODS % Chg Same Qtr Last Yr WOOD PRODUCTS % Chg Same Qtr Last Yr NONMETALLIC MINERAL PRODUCTS % Chg Same Qtr Last Yr PRIMARY METALS % Chg Same Qtr Last Yr FABRICATED METAL PRODUCTS % Chg Same Qtr Last Yr APPENDIX A Forecast Data MACHINERY % Chg Same Qtr Last Yr COMPUTER & ELECTRONIC PRODUCTS % Chg Same Qtr Last Yr ELECTRICAL EQUIPMENT, APPLIANCES & COMPONENTS % Chg Same Qtr Last Yr TRANSPORTATION EQUIPMENT % Chg Same Qtr Last Yr FURNITURE % Chg Same Qtr Last Yr MISCELLANEOUS DURABLE GOODS % Chg Same Qtr Last Yr

16 Table 7: Tennessee Nondurable Goods Manufacturing Employment, Not Seasonally Adjusted (thousands of jobs) History Forecast Data 2012:2 2012:3 2012:4 2013:1 2013:2 2013:3 2013:4 2014:1 2014:2 2014:3 2014:4 2015: TOTAL NONDURABLE GOODS % Chg Same Qtr Last Yr FOOD % Chg Same Qtr Last Yr BEVERAGE & TOBACCO % Chg Same Qtr Last Yr TEXTILE MILLS, TEXTILE MILL PRODUCTS & APPAREL % Chg Same Qtr Last Yr PAPER % Chg Same Qtr Last Yr PRINTING & RELATED SUPPORT % Chg Same Qtr Last Yr CHEMICALS % Chg Same Qtr Last Yr PLASTICS & RUBBER % Chg Same Qtr Last Yr MISCELLANEOUS NONDURABLE GOODS % Chg Same Qtr Last Yr TENNESSEE ECONOMIC REPORT 9 Forecast Data APPENDIX A

17 TENNESSEE ECONOMIC REPORT Table 8: Tennessee Nonfarm Employment by Sector, Seasonally Adjusted (thousands of jobs) History Forecast Data 2012:2 2012:3 2012:4 2013:1 2013:2 2013:3 2013:4 2014:1 2014:2 2014:3 2014:4 2015: TOTAL NONFARM % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr NATURAL RESOURCES, MINING AND CONSTRUCTION % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr MANUFACTURING % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr DURABLE GOODS % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr NONDURABLE GOODS % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr TRADE, TRANSPORTATION, UTILITIES % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr WHOLESALE TRADE % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr RETAIL TRADE % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr TRANSPORTATION & UTILITIES % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr INFORMATION % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr FINANCIAL ACTIVITIES % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr (CONTINUED ON NEXT PAGE) APPENDIX A Forecast Data

18 Table 8: Tennessee Nonfarm Employment by Sector, Seasonally Adjusted (thousands of jobs) History Forecast Data 2012:2 2012:3 2012:4 2013:1 2013:2 2013:3 2013:4 2014:1 2014:2 2014:3 2014:4 2015: PROFESSIONAL & BUSINESS SERVICES % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr EDUCATION & HEALTH SERVICES % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr LEISURE & HOSPITALITY % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr OTHER SERVICES % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr GOVERNMENT % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr FEDERAL, CIVILIAN % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr STATE & LOCAL % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr TENNESSEE ECONOMIC REPORT 11 STATISTICAL DISCREPANCY (% ) Forecast Data APPENDIX A

19 TENNESSEE ECONOMIC REPORT Table 9: Tennessee Durable Goods Manufacturing Employment, Seasonally Adjusted (thousands of jobs) History Forecast Data 2012:2 2012:3 2012:4 2013:1 2013:2 2013:3 2013:4 2014:1 2014:2 2014:3 2014:4 2015: TOTAL DURABLE GOODS % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr WOOD PRODUCTS % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr NONMETALLIC MINERALS % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr PRIMARY METALS % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr APPENDIX A Forecast Data FABRICATED METALS % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr MACHINERY % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr COMPUTERS & ELECTRONICS % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr ELECTRICAL EQUIPMENT, APPLIANCES & COMPONENTS % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr TRANSPORTATION EQUIP % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr FURNITURE % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr MISCELLANEOUS DURABLES % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr

20 Table 10: Tennessee Nondurable Goods Manufacturing Employment, Seasonally Adjusted (thousands of jobs) History Forecast Data 2012:2 2012:3 2012:4 2013:1 2013:2 2013:3 2013:4 2014:1 2014:2 2014:3 2014:4 2015: TOTAL NONDURABLE GOODS % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr FOOD % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr BEVERAGE & TOBACCO % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr TEXTILE MILLS, TEXTILE MILL PRODUCTS & APPAREL % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr PAPER % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr PRINTING & RELATED SUPPORT % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr TENNESSEE ECONOMIC REPORT 13 CHEMICALS % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr PLASTICS & RUBBER % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr MISCELLANEOUS NONDURABLE GOODS % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr Forecast Data APPENDIX A

AN ECONOMIC REPORT TO THE GOVERNOR OF THE STATE OF TENNESSEE

AN ECONOMIC REPORT TO THE GOVERNOR OF THE STATE OF TENNESSEE Matthew N. Murray, Associate Director and Project Director Center for Business and Economic Research PREPARED BY THE Center for Business and