UT Center for Business and Economic Research, CBER, has just released an appraisal on the economic climate for the next few years.

The report is entitled “The Tennessee Business and Economic Outlook: Fall 2010.” Predicting slow economic growth for next few years, the report’s outlook cannot be construed as optimistic. The prognosis indicates it may be 2014 before pre-recession levels of prosperity return.

Matthew Murray, professor of economics and associate director for CBER, authored the report. In evaluating the current economic climate, Murray was careful to rely only on verifiable evidence and concrete scientific research.

“I stay in touch with economic news and data releases on an ongoing basis to keep the economy well framed in my mind,” Murray said. “I also maintain a statistical model of the state economy that is used to produce the forecast itself.”

While the release of this particular economic appraisal was recent, CBER works with the government on a regular basis, offering guidance on the future of the state’s financial interworking.

“The CBER has maintained an econometric model of the state economy for decades,” Murray said. “We receive our funding from the state. The forecast helps state government plan and update its budget outlook for the state.”

The Tennessee economy has mirrored developments within the nation as a whole, except in the area of employment. Tennessee has witnessed a 5.6 percent decline in jobs, whereas the national average is only 4.3 percent. Causes of this phenomenon have been linked to the 14.2 percent cut in manufacturing within the state.

The state lost 155,800 in 2009. Some of the sectors that experienced the worst effects were mining, construction and natural resource production.

There are some encouraging signs in the economy, as the report predicts that all employment areas will see an increase in jobs next year. Unemployment rates will more than likely still soar, however, as previously discouraged workers begin to look for jobs again. These “discouraged workers” tend to skew traditional reports on unemployment rates, because they are potentially productive members of society but have given up seeking work.

Overall, Murray offers a positive outlook on Tennessee’s future, especially given the gravity of the latest recession.

“It may take the full five-year window to restore levels of economic activity to where they were before the recession started,” Murray said. “While the recession officially began in December 2007, many measures of economic activity showed signs of weakening as far back as 2005. Growth should slowly improve in the quarters ahead though the unemployment rate will remain high throughout the next five years.”

Though parts of the report prove at least favorable, the population will still face a sluggish economic revival in the immediate future.

“The prolonged and weak nature of the economy means that state and local government budgets will remain tight for the foreseeable future,” Murray said. “This will require careful planning and, in all likelihood, further budget cuts, given the anti-tax sentiment.”

This dearth of tax revenue is crippling for UT, both on an institutional and individual level. The university has faced wide-ranging budget cuts to various colleges and programs, notably the College of Nursing.

“The growing amount of budget cuts are definitely having deep impacts,” Shelby Talbott, junior in the College of Business, said. “Especially disappointing are the budget cuts to the nursing program, which is a field that is critically important to both the state and the nation right now.”

Students are feeling the economic crisis through tuition hikes as well, which can only be expected to endure through the remainder of the recession. However, some hope does appear to be on the horizon.

Sales across the state of Tennessee showed a marked increase in the second quarter of 2010, even after a 7-percent decline last year.

Though the American Recovery and Reinvestment Act will expire next year, this report did not predict another recession as a result of stimulus-fund expiration.

Murray cautioned students that they will face a bleak job market upon graduation. Also, he lamented that budget cuts across the state had already impacted UT and will continue to in the foreseeable future.

However, students should be encouraged that increasing their economic viability during a downturn is a wise move. Developing specialized intellectual skills will increase their marketability in the future.