UT economists forecast modest growth in 2013

Tennessee’s economy is moving forward, but progress remains painfully slow, according to a University of Tennessee report released today.

After “exceptionally strong rates of economic expansion” in the first quarter, the state economy slowed sharply in the second quarter as effects of the debt crisis in Europe rippled across the globe, says the fall 2012 Business and Economic Outlook.

However, UT economists see the state and national economies posting modest gains through the first half of 2013.

Significant economic improvement is still a year or two away, according to the study prepared by the university’s Center for Business and Economic Research.

“Growth will improve as 2013 unfolds, while 2014 promises to yield much stronger growth for most measures of economic activity,” said Matt Murray, CBER associate director and the report’s author.

The presidential election and the so-called fiscal cliff have injected a measure of uncertainity into the recovery, but “there are also encouraging signs,” Murray said in a news release.

“Automobiles and housing are two sectors that typically lead the economy out of the recession,” he said. “As these sectors continue to improve in the quarters ahead, so will overall economic growth, especially as the economy moves through 2013.”

Click here for the full CBER report.