Diverse and dynamic, the Tennessee economy boasts a gross state product of $375.8 billion. Industries like manufacturing and healthcare are growth pillars, while there are also plenty of opportunities in other sectors. Discover the key elements of Tennessee's economic engine and what lies ahead for businesses and residents.

Noteworthy Factors

• Tennessee's economy is driven by diversified sectors such as manufacturing, agriculture, healthcare, and tourism, with a pro-business climate fostering growth and innovation.
• Employment in Tennessee is robust with key contributions its top sectors, and the state's biggest employers offer a mix of stability and excellent workplace environments.

Tennessee's Economic Landscape

Beneath the hum of Tennessee's thriving music scene and the roar of its manufacturing plants lies an economic powerhouse in the Nashville region. With its staggering gross state product, Tennessee's economy comprises diverse sectors and leads to increasing incomes for many residents.

Of course, different areas of the state have different economic focuses. Leisure, hospitality, and tourism are cornerstones of Nashville's economy, where country music draws fans from all across the globe; the economy of Clarksville, on the other hand, has a focus on healthcare, retail, and manufacturing.

The unemployment rate hovered at a relatively low 3.5% in 2023, a reflection of the vitality of sectors like healthcare, retail trade, and manufacturing in creating jobs. Tennessee's top employers, such as FedEx and HCA Healthcare, shine as beacons of stability, employing tens of thousands and driving the state's economy.

Population Growth and Business Formation

The recent population growth in Tennessee has been nothing short of remarkable, with a 1.2% increase between 2021 and 2022. This surge is a catalyst for economic expansion, as it has propelled a 50% growth in business filings. New businesses blossom across the state, driven by the influx of new residents and their entrepreneurial spirit.

This demographic dynamism is reshaping the state's economy, with more than half a million businesses thriving in an environment ripe for innovation and growth. It is a testament to the state's ability to attract and nurture talent and investment, setting a robust foundation for the state's economy and economic prosperity.

Pro-Business Climate

Tennessee's warm embrace of public-private partnerships fosters an environment where businesses can flourish. Entities like ThinkTN employ data-driven strategies to create policies that bolster the state's economy. This approach ensures that Tennessee is not just open for business but is actively cultivating a landscape where industries can thrive and innovate.

The pro-business climate is a beacon that attracts investments, promising a bright future for the state's economy. It's a synergistic relationship where the success of businesses and the well-being of residents go hand-in-hand, further entwining the threads of economic growth and quality of life.

The Role of Key Industries in Tennessee's Economy

Tennessee's economy is powered by a robust engine of key industries, each playing a vital role in the state's financial fabric. The top industries in Tennessee include:

• Healthcare and social assistance
• Manufacturing
• Agriculture
• Automobiles
• Entertainment

These industries are the lifeblood that drives the state's economy forward.

Education and Workforce Development

Tennessee's institutions of higher education, including those in middle Tennessee, shape the future workforce. With universities like the University of Tennessee and Vanderbilt University, the state is chiseling out a workforce that meets the intricate needs of its diverse industries.

If you're a teacher moving to Tennessee or you're open to a career change, the education sector is a great place to look for a job in Tennessee due to teacher shortages throughout the state. 

Automotive Industry and Manufacturing

The auto industry in Tennessee is a behemoth, with the following companies having a presence in the state:

• Nissan Smyrna Assembly Plant (North America's largest automotive assembly plant)
• General Motors
• Volkswagen

This industry is a cornerstone of the state's manufacturing power.

The arrival of new facilities from Ford and Mullen Technologies signals an expansion of the auto industry, underlining the state's commitment to manufacturing and its pivotal role in Tennessee's economy.

Biggest Employers & Best Companies to Work For in Tennessee

The landscape of Tennessee's employment is dotted with giants of workplace excellence. Forbes' recognition of 34 Tennessee-based companies as top employers is evidence of the state's nurturing environment for businesses and its workforce. Blue Cross Blue Shield of Tennessee stands tall in Chattanooga, leading the pack as the state's top employer.

In the realm of academia, Vanderbilt University in Nashville is lauded not just as an institution of higher learning but as a pinnacle of employment. Similarly, St. Jude Children's Research Hospital in Memphis is a beacon of hope not only for its patients but also for its employees.

The health and education sectors interlace with manufacturing giants like Nissan North America and community health systems, such as Regional One Health, each contributing to the vibrant mosaic of Tennessee's economy.

Tennessee's Future Economic Outlook

Peering into Tennessee's economic crystal ball reveals a future ripe with potential. The state's economy was poised to grow by 3.3% in 2023, with a slightly slower pace expected in the following year. This forecast reflects a state that is constantly evolving, adapting, and growing.

Long-term projections suggest a gentle deceleration in job growth to around 2.2% by 2033, with the state continuing to weave the fabric of its economy with threads of innovation and determination. It's a future that holds promise, even as it calls for vigilance and adaptation in the face of inevitable economic ebbs and flows.

Ready to Start Job-Hunting in Tennessee?

With its pro-business climate, diverse industries, and a workforce shaped by local education, the Tennessee economy stands poised to navigate the twists and turns of economic trends. The Volunteer State is a testimonial to the strength of an economy that's as much about the people as it is about the numbers.

Frequently Asked Questions

What are Tennessee's major industries?

Tennessee's major industries include pharmaceutical, cosmetic, and toiletry wholesaling, healthcare, and manufacturing of products such as computers, electronic equipment, and automobiles.

What is the current economic situation in Tennessee?

Tennessee's economy has seen growth in GDP, job additions, and a decline in the unemployment rate, with the state leading in GDP growth in 2021. The current economic situation in Tennessee is positive, with improvements in various indicators such as job additions and GDP growth. The state's GDP reached $375.8 billion in 2023, representing significant growth from previous years.

Does Tennessee have a good economy?

Yes, Tennessee has a good economy due to its favorable economic outlook, driven by an influx of new residents and strong population growth. This has led to increased economic growth and business formation.