Letís face facts: Memphis is not the strongest market in Tennessee, but can and should be stronger. For some time now and at least for 2011, Nashville and Knoxville will continue to dominate Tennessee in economic activity. Although the Great Recession ended in August 2009, Memphis still suffers from the job losses and high unemployment caused by this event. Throughout most of
2011, the unemployment rate in the Memphis MSA remained at or above 10.0 percent. Unfortunately, Memphis is also hindered by the fact that rural counties with high unemployment rates and depressed agricultural economies surround it. From 1999 to 2009, both Tennessee and Memphis have had little or no net job growth. In the Memphis MSA, only two sectors reported positive job growth between December 2009 and December
2011: government (0.3 percent) and educational and health services (1.0 percent). Can the state or Memphis prosper without job growth? Certainly not.
However, there is good news. From January to September, Tennessee gained 145,000 jobs. During the same time, Memphis gained 22,000 jobs (during the 1990s, Memphis only gained an average of 10,000 jobs a year). Labor market fluctuations during and following a recession are primarily cyclical and usually fix themselves. But, Memphis still has structural issues that remain prevalent.
One such issue is population loss. In order for a city to prosper, it must be a place where people want to live. From 1999 to 2009, Memphis experienced a modest loss of 14,000 people, and the drop in population remains gradual. Still, people are not fleeing the core of the city.
Aging is another issue. Almost 13.0 percent of the Memphis population consists of residents 65 and older, and that number is expected to increase to 21.0 percent by 2050.
Another factor that fortunately is improving is higher education, which is vital to economic growth. Currently, enrollment at the University of Memphis is approximately 22,000, matching the record enrollment in 1972. In the future, enrollment at the University of Memphis could reach 40,000.
So, the future is not all bleak, and Memphis is experiencing a recovery. The economy is slowly recovering, and modest growth should continue in 2011. Adding to that recovery is the recently announced $190 million Electrolux kitchen appliance manufacturing facility to be built at the Frank C. Pidgeon Industrial Park. The plant is expected to directly employ 1,200 workers and support an additional 2,000 jobs indirectly. This will bring millions of extra dollars to the Memphis economy through the spending of Electrolux employees and purchases for supplies and operations by Electrolux and by Electrolux suppliers who choose to locate in and around the Memphis area.
In addition, Mitsubishi Electric just announced that it will be building its $200 million headquarters and manufacturing plant in the Rivergate Industrial Park to produce large power transformers. Mitsubishi plans to hire 275 people, with the majority coming from Memphis.
It appears 2011 has the potential to be a good year for Memphis.
Article compiled by Professor John Gnuschke, Director of the Sparks Bureau of Business and Economic Research. For more information, contact the Sparks Bureau of Business and Economic Research at (901) 678-2281 or email@example.com.