Tennessee

Tennessee: Better luck next year

Tennessee was the 4^th worst performing state in our 2014 EPI state ranking with the EPI score of 83.3%, or C- level. Above US-average unemployment, inflation and budget deficit in combination with negative GDP growth resulted in a low EPI score.

Automotive business is the largest industry in the state, as automotive giants Nissan and GM both have manufacturing sites here.  While the auto industry accounts for three-quarters of all manufacturing jobs, free-trade agreements and low domestic wages in Mexico are attracting more automakers to move their manufacturing plants abroad. Another leading industry in Tennessee is its energy sector. The state’s top five sources of energy are nuclear power, clean air, renewable energy sources, energy efficiency, and the green industry. Ambulatory health care services is also a vital contributor to Tennessee’s economy and contributed to 4.8% of the state’s total GDP and 5.8% of all state employees in 2014.

While the unemployment rate in Tennessee fell by one percentage point from the previous year, unemployment 6.6% it was still higher than the US national average in 2014. Tennessee’s budget deficits at 6.6% for both 2013 and 2014 are still two percentage points above the national rate. Regional inflation was moderate at 1.7%. GDP however declined by 1.8% in 2014, making this the state’s third economic decline since 2007. The plateauing budget deficit along with the negative GDP growth saw Tennessee slide from its EPI ranking of 43^rd to 48^th between 2013 and 2014.