Motor Vehicle Parts Manufacturing Supports Nearly 17,600 Jobs in the Knoxville Metro Area

3/20/2017

The King Institute for Regional Economic Studies (KIRES) has released a new study. KIRES Report No. 17, “Contribution of Motor Vehicle Parts Manufacturing to the Knoxville Metropolitan Economy,” was prepared by Dr. Chris Kauffman and Dr. Jerry Wood, associate professors of Economics and Accounting, respectively, in King University’s School of Business and Economics Knoxville campus.

According to Kauffman, “The purpose of this study is to estimate the contribution and economic impact of motor vehicle parts manufacturing on the Knoxville Metropolitan Statistical Area (MSA). Currently, motor vehicle parts manufacturing represents about 20 percent of all manufacturing activity that occurs in the Knoxville MSA. Because of the significant influence of this industry on the local economy, it is important to understand the trends and impacts of the industry for economic development and policy decisions.”

The Bureau of Labor Statistics defines the Knoxville MSA as Anderson, Blount, Campbell, Grainger, Knox, Loudon, Morgan, Roane, and Union counties.

Wood adds, “The U.S. automotive industry is going through a transformation to become more competitive globally, creating leaner more efficient operations. The Knoxville area is considered an excellent location for the next phase of growth in the automotive sector because of its prime location at the juncture of Interstates I-75, I-40, and I-81; its skilled and experienced workforce; its access to automotive and advance materials research, and an overall favorable business climate.”

The authors report that, except for the recession period of 2007-2009, employment has been steadily increasing in the motor vehicle parts manufacturing industry in the Knoxville MSA. Employment in the sector rose 27 percent from its recession low to 6,487 jobs in 2015.

Kauffman points out, “Continued expansion in motor vehicle parts manufacturing is vital to the health of the Knoxville area economy. Due to the multiplier or spillover effects attributable to motor vehicle parts manufacturing, each job in this industry supports 1.71 jobs in other sectors of the local economy. This means that the 6,487 jobs in this industry in 2015 translate into a total of nearly 17,600 jobs in the Knoxville MSA.”

Woods notes that changes in motor vehicle parts manufacturing activity have important implications for household income in the Knoxville MSA. He states that “each new job created in the industry adds $135,100 to the earnings paid to households employed in all sectors of the local economy.” He explains that “$135,100 are the combined earnings from one new job in the motor vehicle parts manufacturing industry and the 1.71 jobs that are created in other sectors of the economy as a result of the multiplier effect.”

KIRES Report No. 17, “Contribution of Motor Vehicle Parts Manufacturing to the Knoxville Metropolitan Economy,” and the 16 previous reports are available at http://kires.king.edu.

Source: King University

The East Tennessee Economic Development Agency markets and recruits business for the 15 counties in the greater Knoxville-Oak Ridge region of East Tennessee. Visit www.eteda.org

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