Smith, director of the Bureau of Business and Economic Research at East Tennessee State University, spoke at an event called “Tri-Cities Regional Economic Perspective” along with Raymond Owens, senior economist at the Federal Reserve Bank of Richmond.
Smith’s slides showed the Tri-Cities losing to three of its peers – Knoxville, Chattanooga and Asheville, N.C. – in economic performance measures such as real gross domestic product (GDP).
“Asheville, Chattanooga, and Knoxville have positive trends. We have a flat trend since the Great Recession,” Smith noted. “ … (Our) post-recession recovery is a little behind everybody else. The troublesome thing for us was that in 2012 we had a negative slope. We didn’t recover as rapidly as we wanted to. The recovery has not been robust.”
Nearly 30 percent of our region’s total GDP is manufacturing, Smith noted.
“GDP is a measure of the total economy,” he told the bankers. “If you have a lot of people, you can produce a lot of stuff. The real measure of how prosperous your community is the measure of how much GDP per person … our GDP per capita has been declining since 2012 whereas for our peers, it has been steadily increasing.”
One thing our region has, Smith observed, is its natural beauty.
“This is one of the most beautiful places in the world and I think our communities are working hard to leverage the positive aspects of the amenities here,” he said. “We’re doing a lot of work to stimulate the tourism industry. Asheville, North Carolina has managed to brand itself as a place you want to be … We in the Tri-Cities are initiating a branding campaign and I think we’re going to try and replicate some of the things Asheville is doing.”
Smith also pointed out our region has a lot more people dying than babies being born.
Owens said Baby Boomers are retiring at a rate of 10,000 a day.
The nation’s economic growth, Owens said, has not been evenly distributed with U.S. cities growing of late.
“Two percent economic growth is pretty much all we can hope for,” Owens told the bankers. “If the economy was broken, if two percent was substandard, we would see it in labor markets. We wouldn’t be generating lots of jobs but we are. We lost 8.3 million in the Great Recession, a lot of jobs very quickly. The Great Recession ended in 2009, and job growth started to be positive in January 2010 … We turned the corner more quickly.”
On whether the Federal Reserve will raise interest rates, Owens responded: “What little bit I know about it I’m not allowed to tell you.”