Economically speaking, when the rest of the nation gets pneumonia, Nashville usually comes down with a cold.
The fact isto quote standard Chamber of Commerce boilerplatewe have a relatively diversified economy, our labor force is cheap and shows up to work on time, and at last count three major interstates were entering and exiting through the heart of the city. Others are probably being planned.
Statistically speaking, Davidson County has been hit throughout this recent economic unpleasantness, but not as bad as might be expected. Our unemployment rate is certainly lower than both the state and national rates. For September, it stood at 3.9 percent, while the state’s was 4.5 percent and the nation’s registered at 5.4 percent. In a couple of adjoining counties with strong economic enginesRutherford and Williamsonthe unemployment rates were 3.8 percent and 2.6 percent, respectively. That’s nothing to sneeze at.
But if you look at the longer-term picture over the last several years, there’s no denying we’re off here in Nashville. For 1998, the unemployment rate for Davidson County was a scant 2.6 percent. Thus far in 2002, we’re averaging 4 percent.
Sales tax revenuewhich is as convenient a barometer for retail economic activity here as anyhas been off as well. For the fiscal year 1999-2000, total sales tax revenue in Davidson County was just over $94 million. That stayed constant through the next fiscal year, but in fiscal year 2001-2002, sales tax collections dropped to approximately $91 million. Again, while it’s not a catastrophe, it’s certainly a sign that people are spending less.
Longer term, separate and apart from the statistics, there may be bigger questions about this city’s economic health looming on the horizon. Our sense is that not everything is rosy. Something seems to have gone out of Nashville’s balloon lately. Notice any bright and shining, up-and-coming businesses? The big public companies that form our economic psycheHospital Corp. of America, Corrections Corp. of America, Dollar General, Central Parkingare all what you might consider mature companies. It’s likely that their huge revenue growth is behind them even if their earnings may continue to improve. But the more important point is this: As you view the landscape of our city’s economy, can you identify any companies that you think might grow to similar heft in the next 25 years?
What about in health care? Physician roll-ups as business models have been discredited. So, nothing really comes to mind.
What about Music Row? Not only is business seemingly flat, but it’s all owned by out-of-towners. Some even think the whole business will one day vanish.
What about the city’s financial fabric? The banks really aren’t players any morethey’re all based outside Tennessee. More problematically, J.C. Bradford and Equitabletwo large, full-service investment houseshave disappeared, which has dried up an enormous amount of entrepreneurial activity. While a couple of hopefuls are out there trying to be the next investment house (Avondale Partners and Harpeth Capital among them), there’s no such thing as a sure shot in a business that is so dominated by heft.
Down at the Metro Courthouse, meanwhile, we get the sense that the party is being planned but that it’s unclear whether anyone will show up. The Purcell administration is fond of talking about Rolling Mill Hill, which is an excellent piece of property for a retail/office/residential development. But Lower Broadway is looking like it’s missing teeth, and the exodus from downtown office space continues. Why should the city be creating new commercial space absent any meaningful economic spark in the city?
Building a solid local economy that has some sizzle to it is vital to attracting talented, smart residents to move here. We used to have considerable zip when it came to being an entrepreneurially hot city. But now, it’s doubtful whether that climate exists. To the powers-at-large, we would encourage some head-scratching about how to return Nashville to being a center of new ideas, business plans and smart entrepreneurship.
Well said Steve.
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