Transportation and Health Care Are Pockets of Strength in Memphis' Slow Recovery

ST. LOUIS—According to analysis published by the Federal Reserve Bank of St. Louis, despite steady growth in a few major industries, differing conditions across sectors have resulted in a mixed economic outlook for the Memphis metropolitan region.  These findings are the subject of a recent article in The Regional Economist. 

The report found the following about the Memphis metropolitan statistical area (MSA):

• The transportation and utilities industry makes up 10.7 percent of employment, compared with just 2.5 percent nationally.
• The significant health-services presence in the city, along with local school districts and the University of Memphis, have made the education and health-services industry the second largest by employment at 14.5 percent, after trade, transportation and utilities.
• Memphis lags behind much of the nation in the economic recovery. From Q2 of 2012 to Q2 of 2013, nonfarm payrolls grew 0.9 percent, compared with 1.6 percent nationally.
• As measured by the FHFA, housing prices rose 1.4 percent in Q2 of 2013 from one year earlier, compared with an increase of 4.0 percent nationally.

Overall, Memphis faces many obstacles along the path toward economic recovery. Persistently high unemployment, coupled with slow growth in most industries and a sluggish housing market, suggests a long road ahead. The St. Louis Fed analysis noted that if employment growth continues along its current path, Memphis will not hit its 2006 peak level of employment again until about 2019.

If trends continue, education, health, professional and business services will remain a source of economic strength. Strong growth in these key industries as well as urban-renewal projects are providing reasons for optimism, according to the report.