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Steady economic growth through 2000 is forecast in the University of Tennessee’s economic report to Gov. Don Sundquist.

The report also says education is critical to sustaining Tennessee’s economic growth into the next decade.

“Economic growth will provide great opportunities for those Tennesseans who are well educated and able to adapt to new jobs and changing technologies over the next decade,” said Dr. Bill Fox, director of UT-Knoxville’s Center for Business and Economic Research which did the governor’s report.

“A strong, healthy educational system is necessary to ensure good job opportunities and successful employment transition and retraining for displaced workers.”

The 1999 forecast includes:

— 1.7 percent job growth, the same pace as 1998.

— 4.3 percent unemployment, up a tenth of a point from last year.

— 5.0 percent personal income growth, compared to 4.6 percent in 1998, reflecting slightly higher inflation.

— 4.1 percent growth in taxable sales, more than double the 1998 rate.

The loss of manufacturing jobs and agricultural income is expected this year and next, the report says.

Dr. Matt Murray, CBER associate director, said state economic growth is leveling off after booming in the 1990s. The slowdown does not reflect economic weakness as much as an economy at full employment potential with little room for growth, he said.

“Tennessee’s economy is like a car merging on the interstate,” Murray said. “It initially accelerates rapidly, but as it reaches top speed, the power wanes and acceleration slows.

“There is simply less capacity for growth at the rates we have enjoyed throughout this decade.”

Tennessee’s long term forecast includes 34 percent growth in industrial production by 2007, 35 percent increase in service jobs, and 30 percent growth in construction employment.

Unemployment is expected to remain below 5.1 percent over the next eight years, the report says.

The biggest increase projected in the report is for personal income growth. It’s expected go up about $12,400 over the current average of $23,482.

Overall manufacturing will see a 32 percent increase in jobs through 2007, but textiles and apparel jobs are expected to plummet as much as 50 percent, the report says.