Knoxville Area’s Impressive Job Gains
The Knoxville area’s robust economic growth this past year has yielded many benefits and, barring a business cycle downtown, would appear to bode well for impressive further gains.
Whether measured in terms of employment growth, business investment or tax revenues, the Knoxville metropolitan area comes to the forefront among Tennessee’s big four MSA’s and several other “peers” in surrounding states.
According to data compiled by Younger Associates to assess the success of the area’s Jobs Now! initiative, there were 5,351 new job announcements in the six-county Knoxville MSA in 2005. That compares to 1,530 in the Chattanooga area, 4,409 in the Memphis area and 5,473 in the Nashville area. Considering that the Nashville MSA encompasses 13 counties with a population nearly double the Knoxville area’s 737,344, the growth here outstrips all the others in percentage terms.
When it comes to capital investment, the Knoxville area ranks an absolute first with $698 million invested last year. That compares to $106 million in the Chattanooga area, $585 million in the Memphis area, and $523 million in the Nashville area—all according to reports submitted to the Tennessee Department of Economic and Community Development that Younger drew upon.
The Jobs Now! campaign, backed by $10 million in local government and corporate funding over a five-year span, deserves a considerable part of the credit for these gains. The campaign’s first three years (2003-2005) have yielded 20,511 net new jobs and capital investment of $1.84 billion—both in excess of the campaign’s initial goals. While these gains are somewhat lower than the Memphis and Nashville areas’ in absolute terms, they are far higher percentage-wise.
What’s perhaps even more important now is the prospect of sustained further growth to be derived from the momentum built by the campaign. Jobs Now! marketing and promotional efforts have helped placed Knoxville among the top 25 places in the country to do business for four years running on a Forbes magazine list—the only Tennessee city to do so. Expansion Management magazine has awarded us a “5 Star Metro” ranking, and Knoxville has been anointed as the “#1 best place to live for cities under 1 million” by Places Rated Almanac.
Job’s Now executive director Doug Harvey reports that the number of active prospects being recruited has more than doubled over the past year to 37 during the first quarter of 2006. “Every one of them is a direct result of our outreach efforts,” Harvey says. But he cautions that, per an industry rule of thumb, the Knoxville area will do well to land one in four of them.
The Knox County Development Corp. is striving to keep pace with the demand by acquiring and improving sites for industrial and other corporate locations. Grading and infrastructure work on a new, 80-acre Hardin Valley Business Park is due to be completed by year-end. The Development Corp. used the proceeds from the sale of the former Coster Shop property to Sysco Corp. for a major distribution center and applied them to the purchase of the former Brookside Mills property on Baxter Avenue that has long been languishing. It’s now being site prepped and marketed as well. A much bigger step is the imminent purchase of 350-400 acres (depending on how negotiations with present owners and rezonings go) of prime property near I-40’s Midway Road Interchange. About $11 million in infrastructure, atop an $11 million purchase price, will go into this major new business park which will replenish depleted inventory (except for some 200 acres of less desirably located property at Eastbridge).
Knox County, which is the Development Corp.’s primary source of funding, is also proceeding in collaboration with Blount County and the cities of Alcoa and Maryville on the development of a 450-acre technology park at the southern tip of the Pellissippi Parkway. This $20 million undertaking that will seek to cultivate high tech businesses is a testament to County Mayor Mike Ragsdale’s advocacy of regionalism in economic development. At the same time, Oak Ridge National Laboratory has provided a site and other backing for an innovation Valley Science and Technology Park that anticipates a big corporate demand for facilities adjacent to ORNL’s now functional Spallation Neutron Source and other world-renowned research capabilities.
So there’s every reason to believe the area’s economic growth will continue to be strong with resultant growth in everything from its population to its tax base. According to Younger’s data, 2005 developments alone beget $418 million in additional wages (counting indirect as well as direct employment), $327 million in expenditures and $16 million in local taxes.
One way in which the Knoxville area doesn’t compare so favorably is earnings per job. Its average earnings of $38,748 ranks in the middle of the pack of 9 metropolitan areas surveyed by Younger that also include Birmingham and Huntsville, Ala., Lexington, Ky., and Columbia and Greenville, S.C. “We still have some work to do on wages to reach a 2008 goal of $40, 908,” Harvey acknowledges.
On the other hand, the Knoxville area ranks second only to Nashville (boosted mostly by its “ring” counties) among the nine when it comes to population growth rates. Between 2000 and 2006, the Knoxville area’s 7.3 percent growth rate was nearly double Chattanooga’s and half again larger than Memphis’.
So, as our two mayors are so fond of saying and in no small part due to their collaborative efforts, Knoxville is truly a city on the move.