First Horizon Bank is financing an area Economic Conditions Outlook report through the Knoxville Chamber. Each month, the report lists economic indicators, based on a monthly survey of businesses in the manufacturing, retail and service sectors. From these we gain insights into the economic outlook for the next six months.
The report also includes traditional labor market, housing, sales tax and airport information as well as impromptu information as it becomes available. Find the full report here.
We hope that ECO will help our regional business community make more-informed decisions as they run their businesses. Here are some results from November 2020:
Manufacturing: Outlook is mixed while the level of general business activity has “improved.” But the six-month outlook in most categories suggests “no change,” while the October survey indicated “increases” in several categories.
Retail: Knox area retailers said business outlook has “improved” from the previous month. November showed mostly increases in net sales, wages and benefits, and number of full-time employees. “No change” was reported for internet sales, number of part-time employees, capital expenditures, and inventories. Restaurants continue to be impacted by pandemic-related seating capacity limits and differing COVID-19 restrictions from one jurisdiction to the other which complicates things for businesses that have multiple locations. There also is post-election uncertainty regarding any potential changes to policies, taxes, etc.
Service: Businesses reported mixed activity and an outlook mostly unchanged from October. Respondents expect “no change” for the six months ahead in number of employees, average employee workweek, capital expenditures, and wages and benefits. Hiring entry-level workers remains difficult. Attractions are seeing some improvement as the number of visitors slowly increases.
Labor market: The Knoxville MSA’s unemployment rate in October was 6.0%. That’s an increase from September’s 4.7% and double the 3.0% of October 2019. Tennessee’s unemployment rate was 7.2% in October (6.2% in September and 3.2% in October2019). Meanwhile, the U.S. unemployment rate dropped to 6.6% in October (it was 7.7% in September and 3.3% last October).
Job market: In October, there were 30,971 unique active job postings in the Knoxville MSA, (up 6.3% from September and up 3.5% from last October).
Consumer Price Index: The national inflation rate from October 2019 to October 2020 is 1.2%. The current inflation rate for this region is 1.4% for the same period.
Housing market: October’s existing-home sales in the Knoxville area were up 0.5% from September and up 18% from one year ago. Nationally, existing-home sales in October grew to 6.85 million – up 4.3% from the prior month and 26.6% from one year ago – marking the fifth consecutive month of year-over-year gains. The median home sales price in the Knoxville area was $249,000 in October – up 5.5% from September and almost 25% from one year ago.
Remember, if you are more comfortable with charts and graphs, the full report contains both.
Dave Miller is president of the East Tennessee Region of First Horizon Bank.