The Chattanooga metro economy does not exist in a vacuum. Like every other metro area in the United States, it is subject to the ups and downs of the national economy. If the national economy is doing well then Chattanooga’s probably is, too. Given its location, geography also plays a role in how well the local economy is doing. Chattanooga lies at the center of a square whose corners are larger metro areas that, for the most part, have been performing better than the national economy, are close by, and are connected directly to one another by interstate highways.
Atlanta, for example, has been the economic behemoth of the Southeast for decades, and its downtown is only 104 miles as the crow flies from Chattanooga’s. The outer reaches of the two metro areas are less than 50 miles apart. Nashville is one of the latest Southern metro areas to boom economically, and it is only a bit further away from Chattanooga than Atlanta is. Knoxville is the closest large metro area. It is about five miles closer than Atlanta and it shares the Tennessee Valley with Chattanooga. The Birmingham metro area is the odd man out in that it has not seen the rapid economic growth that occurred in the other three large metro areas. Nonetheless, it is home to more than a million people and downtown Birmingham is less than a 150-mile drive from downtown Chattanooga.
Given the proximity and connectedness of these large metro areas to Chattanooga, their economic performance should be taken into account when trying to understand or predict the economic performance of the Chattanooga metro area. Indeed, as shown by new research by the Center for Regional Economic Research, higher growth in the Atlanta, Knoxville, and Nashville metro areas tends to be followed by higher growth in the Chattanooga metro area. Good fortune in Birmingham, on the other hand, tends to be followed by lower growth in Chattanooga.
In short, if you are trying to predict what might happen in Chattanooga tomorrow, it is worth knowing what is happening in the other metro areas today. Or, when it comes to Chattanooga’s economy, what happens in Atlanta, Nashville, and Knoxville doesn’t stay in Atlanta, Nashville, and Knoxville.
