KNOXVILLE (AP) – University of Tennessee researchers are predicting modest economic gains for the state through the first half of 2013, but they say significant economic improvement is still a year or two away.
That's according to UT's fall 2012 Business and Economic Outlook released this week by the school's Center for Business and Economic Research.
CBER Associate Director Matt Murray, the report's author, told The Knoxville News Sentinel in an interview that an increase in residential building permits and rising home prices are signs of a strengthening housing market that could have broad implications for the overall economy.
"That could be a real game changer," he said.
The state unemployment rate is expected to average 8.2 percent this year, down from 9.2 percent in 2011.
Taxable sales are expected to rise 5.9 percent this year.
Also, most sectors show prospects for job growth in 2012 and 2013, the report found. Nonfarm jobs should increase 1.6 percent this year and 1.4 percent next year, with the strongest growth in the natural resources and mining sectors. Construction jobs should also see growth as the housing sector improves.
Tennessee's economic expansion was strong in the first quarter of 2012 but then slowed sharply, in part due to the European debt crisis, the report said. Since then, the presidential election and threat of severe federal budget cuts in early 2013 – often called the fiscal cliff – have also injected a measure of uncertainty into the recovery. But increased auto sales and continued improvement in the housing market are encouraging signs.
"The good news is the expansion, the recovery continues to take place," Murray said. "We expect to see growth accelerate in 2013 as we resolve the fiscal cliff here in the U.S."
Information from: The Knoxville News Sentinel, www.knoxnews.com
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