KNOXVILLE, Tenn. — Tennessee’s robust economy is showing signs of slowing down, a University of Tennessee researcher said Thursday.
Dr. Matt Murray of UT-Knoxville’s Center for Business and Economic Research said the slowdown does not bode wellfor state revenue collections, which already have forced state budget cuts and employee layoffs.
Murray also said a U.S. Commerce Department report Tuesday that retail sales nationwide fell 0.3 percent in April was “another bit of bad news.”
“April sales will translate into May sales tax collections,” Murray said. “The last thing we need is a further slowdown in the economy — any kind of slowdown in the pace of growth of retail sales.
“If Tennessee had a weak retail sales month in April, we won’t know the consequences in terms of tax collections for several weeks.”
Murray said he did not have a simple explanation for the slowdown, which threatens a period of economic growth that began in Tennessee about 1990. He cited factors that might be affecting the state economy:
— Twelve to 24 months ago, Tennessee’s economy reached its full potential in terms of production and its ability to pull workers into the labor force.
— At full potential, sustained economic growth, year after year, is exceedingly difficult to maintain.
— To aggravate the problem, a slowdown in manufacturing activity began about two years ago. Durable and non-durable manufacturing have been affected, but the slowdown has been more severe in non-durables.
“The drain on non-durable manufacturing jobs in textiles and leather has hurt Tennessee quite seriously,” Murray said.
Contact: Dr. Matt Murray (423-974-5441)