The economy is in the tank. The economy is not in the tank.
Or, it’s not as bad as some thought but it’s not as good as others want, so therefore it’s still bad. Got it? It all depends on one’s perspective.
Reading the headlines in the financial press or any media outlet can be a depressing schizophrenic exercise that would lead you to drink heavily, or checkout and move to a secluded mountain top.
Jobs up. Jobs down. Stock market rises on bad economic report. Stock market drops on good economic report. Sometimes it seems to have no rhyme or reason, with everyone’s mood fluctuating as much as gas prices.
Around Nashville business circles, people have wondered what all the fuss is about. Generally speaking, to them, the Nashville-area economy is still humming along just fine with kind of a Goldilocks attribute.
Economists, economic developers, real estate brokers and business leaders have long touted Nashville’s diverse economic ability to protect against large economic swings. It never blows the roof off like other cities but never falls through the floor like those cities.
Unemployment is under 4 percent and workers on average are earning more here. Job growth continues, though at a slower pace than year’s past.
Commercial real estate, a gauge of where the economy may be headed, is strong right now. Brokers say companies are expanding their space and new ones are looking for office space here.
That’s no hyperbole on their part. When no one is around kicking the tires, brokers will whine about it to high heaven and the weak brokers go away.
Industrial real estate, a leading indicator for office, is slower now but still posting good leasing numbers.
“Our prospect flow is as strong today as it was six months ago,” said Janet Miller, the Nashville chamber’s economic development chief.
Of course, it’s not all rosy. David Penn, director of Middle Tennessee State University’s Business and Economic Research Center, said growth slowed in the third quarter and thinks the figures will show slower growth in the fourth quarter.
Job growth for the year could be 9,000-10,000 jobs, Penn said.
“That job number is key,” said Tom Frye, managing director of CB Richard Ellis and a former banker. He said it could be a tough year if the figure drops below 10,000.
“We’re one good relocation away from having a good year,” Frye said.
Slackening housing construction is driving the slowdown. Housing sales aren’t at the blistering pace of the past few years. Bill Fox, director of University of Tennessee, Knoxville’s center for business and economic research, said non-residential construction is still strong across the state.
The sub prime mortgage mess nationally hasn’t had a tremendous impact here.
“It hasn’t really taken people out of the purchase market,” said Scott Ractliffe, a senior vice president and mortgage advisor with Pinnacle Financial Partners.
He said much of the sub prime lending involved refinancing existing loans, borrowing more to pay off other debt and that’s where they got into trouble.
National headlines about housing woes have prompted the pessimism in the local housing market.
Sellers are having a hard time selling at prices they want, meaning less profit. If anything, though, the housing malaise has put a damper on sellers seeking ridiculous prices only to go pay a ridiculous price for a new house with the proceeds.