King University issues retail, employment report analyses


KIRES Professors Alexander Brumlik and Sam Evans. Photo by Scott Robertson

By Scott Robertson

pair of reports issued last month by the King Institute for Regional Economic Studies (KIRES) show the interconnectedness of the two topics in the regional economy. The reports, released around the 10th anniversary of the Great Recession, give room for guarded optimism.

Immediately following the recession, there were 12,917 fewer jobs in Northeast Tennessee, according to the Post-Recession Job Outlook Report prepared by Dr. Alexander Brumlik and Dr. Sam Evans. At that time, larger cities in Northeast Tennessee had fared much better than their rural counterparts. For example, Kingsport-Bristol saw a 5.3 percent decline, below the state average, while Greene County experienced a decline twice that of the state average.

Brumlik and Evans say the employment news since that time has been good, but not great. “Each region within Northeast Tennessee saw employment gains over the past seven years, and, as a whole, there were 8,797 more jobs. Every region in our study saw large upticks in hiring, pushing 15 percent,” the report states. “However, if we go back and compare the employment situation in mid-2016 to levels prior to the recession, we see a much less favorable situation. Northeast Tennessee still had a net loss of 4,120 jobs (-2.2%).

“If we narrow the analysis to industry growth after the recession; that is, 2009-2016, we see that Retail Trade and Accommodation & Food Services were the two industries that had the most jobs added.

“However,” the report continues, “the establishment of new businesses in these sectors often provides little economic impact. When the primary customers are local residents, then competition among retailers tends to operate like a zero-sum-game, with the gains of one retailer often coming at the expense of another business. Thus, new businesses add little to the region’s economic base.”

The second KIRES report, regarding retail spending, points out the areas where that truism fails. “Our analysis indicates that 17.15 percent of retail sales were to nonresidents in 2016,” says KIRES’ Drew McCrary, who joined Brumlik and Evans as a co-author of the retail report. “That portion of retail trade can be considered a basic industry, bringing new dollars to the region and yielding a positive economic impact.” The retail study also found that dollar sales to nonresidents have risen over time, from an estimated $729 million in 2013 to $1,356 million in 2016.  Evans notes that “this is good news for the Tri-Cities given the substantial investment in new retail development in recent years.”

The authors report that the main economic impacts of sales to nonresidents are the creation of 6,993 new full-time and part-time jobs in all sectors of the regional economy and an increase of $218 million in earnings received by households employed in all industries in the Tri-Cities.

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