8 minute read
DATA BANK
MUCH OF THE STORY ABOUT HOW COVID-19
is affecting various parts of the economy remains to be written. But the pandemic’s impact on real estate is likely to linger for a long time. Here are a few data points from its early days.
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CLAIMS PAIN
The spike in unemployment this past spring left few sectors without serious scars. But once the state’s economy began reopening, not all its parts rebounded at the same pace. Based on their share of total continued unemployment insurance claims, manufacturers are ramping up more quickly than the hospitality and business services sectors.
May 30 July 25
OFF THE BOTTOM
As of this summer, mortgage delinquency and foreclosure rates weren’t yet showing the e ects of the pandemic, but the coming quarters will show whether rates might approach or surpass those of the Great Recession. Here’s how area counties finished 2019 versus the last downturn’s peak.
COUNTY DELINQUENCY
Cheatham -79.2% Davidson -87.1% Dickson -81.0% Maury -88.2% Montgomery -56.9% Robertson -76.7% Rutherford -85.5% Sumner -83.6% Williamson -89.7% Wilson -87.8%
FORECLOSURES
-93.0% -94.8% -93.8% -95.0% -76.6% -90.9% -93.6% -91.2% -96.7% -96.1%
Source: CoreLogic, Tennessee Housing Development Agency 18% 10%
Leisure/hospitality
Trade Manufacturing
Education/health
By mid-summer, state data showed that Williamson County was recovering more quickly than others in the area, particularly more tourist-reliant Davidson. Here are the shares of continued unemployment claims as a share of the labor force as of July 25.
Source: Tennessee Department of Labor and Workforce Development, UT Boyd Center for Business & Economic Research Business services
Other
Williamson ...................4.7% Dickson ........................ 5.6% Cheatham .................... 5.8% Robertson.................... 6.6% Sumner ........................ 6.9% Wilson ...........................7.0% Montgomery ................7.5% Rutherford ....................7.5% Maury ........................... 9.0% Davidson .....................11.1%
RETREATING RENTS
Not surprisingly, the country’s apartment market is repricing itself during the pandemic. Research firm Yardi Matrix noted that national rents were down in June from the year prior — the first time that had happened since December 2010. In March and April, Nashville rents were up about 4 percent year over year, making Music City one of the country’s hottest markets for rental properties. Here’s how those numbers had changed by early August.
MEDIAN ’19-’20 CITY RENT CHANGE
Nashville $1,160 0.4% Murfreesboro $1,140 0.4% Franklin $1,330 1.2% Hendersonville $1,260 1.4% Smyrna $1,310 2.9% Gallatin $1,060 0 Goodlettsville $1,160 -0.3%
Source: Apartment List
’18-’19 CHANGE
2.6% 3.1% 1.3% 3.1% 2.3% 0.8% 1.4%
By year’s end, Nashville rents are forecast to fall, albeit less than those in a number of its peer cities.
YEAR-END RENT METRO GROWTH FORECAST
Denver -5.9% Atlanta -5.9% Orlando -5.3% Indianapolis -3.8% Charlotte -3.4% Nashville -3.3% Austin -1.5%
Source: Yardi Matrix
A CHANGING ECONOMIC LANDSCAPE
THE CHAMBER’S RESEARCH CENTER UNCOVERS INSIGHTS TO HELP BUSINESS LEADERS UNDERSTAND A CHANGING ECONOMIC LANDSCAPE
The economic landscape in Middle Tennessee is changing. The Nashville Area Chamber of Commerce Research Center (The Research Center) is set to release a new workforce development study which will unveil insights aimed to help business leaders understand this shifting landscape.
The purpose of this study is to help leaders understand the data and trends underpinning examine economic, occupational and industry strengths and the opportunities and challenges posed by these strengths.
The Research Center began their work with an industry growth analysis and target market assessment for the Nashville Metropolitan Statistical Area (MSA) and the Clarksville MSA; regional industry growth. The study will
combined, these MSAs comprise the economic region.
Industry Growth Analysis
The industry growth analysis assessed growth over time in the number of establishments, employment and wages for each county in the economic region.
Through this data, The Research Center identifi ed high growth and high wage industries as healthcare; transportation equipment manufacturing; and businesses services. Education and the leisure and hospitality industries were also identifi ed as high growth areas.
HIGH GROWTH INDUSTRIES
EDUCATION HOSPITALITY
& LEISURE
HIGH GROWTH & HIGH WAGE INDUSTRIES
Industry Cluster Analysis
Industry clusters are groups of related businesses that function interdependently creating a competitive hub for linked industries that share common markets, occupational skills and technologies within a given region.
Clusters are important to the economic landscape because they allow for shared access to specialized suppliers, skilled workers, proximity to competitors and a base of industry knowledge. Clusters create a localized competitive advantage over similar industries operating in more isolated locations.
The Research Center identified traded and local clusters for the economic region using data from the U.S. Cluster Mapping Project and location quotients. Traded clusters are industry groups which provide goods or services beyond a region’s geographic boundaries, bringing in capital from outside the region. These clusters benefit from a strong global business climate and account for about 33 percent of a region’s employment while providing 50 percent of wages and more than 90 percent of a region’s research and development. Local clusters provide goods and services to a limited service geography.
Through this analysis, The Research Center identified 10 traded clusters, two local clusters and four opportunity clusters (see illustration).
Industry Cluster Advantages and Opportunities
A closer look at the Nashville economic region’s industry clusters identifies opportunities for economic and workforce development stakeholders and policy makers to capitalize on the region’s strengths and create new opportunities for growth.
Automotive and advanced manufacturing are two of the largest clusters in the region, both of which led to growth in metals and plastics manufacturing. These four industries have spurred the growth of the transportation, distribution and logistics industry.
The increase of advanced manufacturing in the region presents opportunities for further growth in chemical manufacturing. The presence of industrial
TRADED CLUSTERS
ADVANCED MANUFACTURING AUTOMOTIVE BUSINESS SERVICES
DOWNSTREAM CHEMICALS INSURANCE
METALS MUSIC PERFORMING ARTS
PLASTICS TRANSPORTATION
DISTRIBUTION &
LOGISTICS
OPPORTUNITY CLUSTERS
INFORMATION TECHNOLOGY PRODUCTION TECHNOLOGY MEDICAL DEVICE
LOCAL CLUSTERS
HEALTH CARE EDUCATION
and occupational specializations in these clusters lends itself well to create a medical device manufacturing cluster in Middle Tennessee that could rival the Memphis region.
Davidson and Williamson Counties have seen increases in business services involving management of companies or headquarters. Additionally, insurance and captive insurance firms have seen significant growth, thanks in part to a strong push by the State of Tennessee to tailor a regulatory framework conducive to the growth and recruitment of captive firms. The increase of the local health-related cluster has also underpinned the growth in insurance-related industries. Between these business clusters and the insurance industries, there is an opportunity for a highly specialized information technology cluster.
Housing and Transportation in the age of COVID-19
Housing and transportation are critical to Middle Tennessee’s quality of life. The Research Center considered both issues as they relate to workforce, including the impact of COVID-19 on efforts to improve housing and transportation quality and access.
A common housing metric is cost burden. A household or individual is considered cost burdened if they spend 30 percent or more of their take-home pay on housing. Data from the economic region shows disparities when broken out by race, ethnicity, ownership status and educational attainment.
ACCORDING TO THE 2O19
VITAL SIGNS SURVEY,
IN THE JOINT METRO
REGION APPROXIMATELY
6O% OF BLACK OR
AFRICAN AMERICAN HOUSEHOLDS ARE COST
BURDENED COMPARED TO APPROXIMATELY 4O% OF
WHITE HOUSEHOLDS.
SIMILARLY,
APPROXIMATELY 6O%
OF HISPANIC OR LATINO
HOUSEHOLDS ARE COST
BURDENED COMPARED TO APPROXIMATELY 4O% OF WHITE HOUSEHOLDS THAT ARE NOT HISPANIC OR LATINO.
This housing and transportation data represents a period before COVID-19’s impact on Middle Tennessee. More households have become cost burdened as individuals have lost employment, been furloughed or experienced reduced income. As eviction moratoriums end, the effects of the economic downturn will become more severe.
THIS IS SEEN DISPROPORTIONATELY IN RENTERS. ACROSS THE JOINT METRO REGION
48%
26%
48% OF
RENTER-OCCUPIED
HOUSEHOLDS ARE
COST BURDENED.
26% OF
OWNER-OCCUPIED ARE COST BURDENED.
HOUSEHOLDS WITH A MORTGAGE ARE
COST BURDENED.
BURDENED.
While cost burden related to housing has been negatively impacted by COVID-19, Middle Tennesseans who commute to work are experiencing far less traffi c on the roads than is typical. In 2018 in the Nashville MSA, approximately 20 percent of daily commuters experienced a commute of over 45 minutes. Over the last fi ve years, remote working has been on the rise, particularly in the Nashville MSA, increasing from approximately 4 percent to 6 percent of the labor force. With the sudden impact of COVID-19, many organizations have been forced to suddenly turn to remote work and are now fi ne-tuning their remote work policies with indications that remote working will become an ever increasing trend for years to come.
Industry Diversity by County in Tennessee
CLARKSVILLE MSA
NASHVILLE MSA 81% - 1OO%
21% - 4O% 61% - 8O%
O% - 2O% 41% - 6O%
The numbers associated with each county represent their ranking among all counties in the United States.
ROBERTSON MONTGOMERY STEWART SUMNER MACON TROUSDALE CHEATHAM SMITH DICKSON DAVIDSON WILSON
WILLIAMSON RUTHERFORD CANNON
MAURY
County CANNON CHEATHAM DAVIDSON DICKSON MACON MAURY MONTGOMERY ROBERTSON RUTHERFORD STEWART SMITH SUMNER TROUSDALE WILLIAMSON Ranking
1,896 2,785 367 2,128 2,226 1,828 579 2,441 1,482 2,784 2,529 473 1,187 1,535
This map shows industry diversity percentile by county in Tennessee, highlighting Nashville and Clarksville Metropolitan Statistical Areas (MSA). Industry Diversity Rankings are included for these MSAs. Map courtesy of Shruthi Kumar, Nashville Area Chamber of Commerce, The Research Center Consultant.
The diversity of industry that comprises Middle Tennessee creates a landscape with the promise of economic strength, resilience and prosperity. This future growth is dependent on how the challenges presented by workforce demand and COVID-19 are addressed. While this excerpt discusses regional shifts and prospects that growth and COVID-19 has had on industry, transportation and housing, it is important to note another opportunity for our region. The workforce study will include a section on the strategic importance of childcare as an imperative to ensuring the strength of the region’s economy during and post COVID-19. Whether business recruitment, industry growth, or the challenges facing the region in terms of workforce development, housing, transportation or childcare, the Chamber encourages the business community and the community at large to be a part of the conversation to find solutions that make the Nashville region the best place to live and work.
nashvillechamber.com/research
