KNOXVILLE, Tenn. — Current evidence suggests Tennessee’s slowing economic growth may accelerate in 1997, a University of Tennessee economist said Monday.
“The economy continues to be strong, and the data we’re collecting now lead me to believe it may return to a strong pace of growth next year,” Dr. Matt Murray said.
The quarterly Tennessee economic forecast, released Monday by the UT-Knoxville Center for Business and Economic Research, projects for 1997:
* A slight increase in taxable sales.
* An end to the loss of manufacturing jobs.
* Continued low unemployment.
* A slight decline in personal income.
“We’re going to see some sales tax growth, but we’re not going to see the kind of growth we saw a couple of years ago when taxable sales were growing very rapidly,” Murray said.
The risk that the national economy could slip into recession is lessened every day the economy holds its own and continues to grow, even at a slow rate, Murray said.
Business responses to the job, income and sales pictures will help determine whether the economy rebounds or slips into recession, he said.
“Businesses by and large make investment and production decisions based on recent patterns of economic growth,” Murray said.
“If businesses see the economy slowing appreciably and extend that trend into the future, they’re not likely to make investments in plants and equipment they otherwise would do. Therefore, a slowdown in one period can translate into a slowdown on down the line. That’s the kind of thing we’re concerned about.”
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Contact: Matt Murray (423-974-2225)