Nashville is well positioned for the next economic expansion

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  • David Waddell is CEO and Chief Investment Strategist of Waddell and Associates.

In 2019, I paraded through Nashville with a presentation titled “Recession 2020, what are you going to do about it? ”

I wasn’t trying to get famous for correctly predicting the time of the next economic recession, but just trying to get complacent investors and business owners to start thinking defensively in order to protect hard earnings. gained after such a long economic advance.

A record streak

In fact, the economic expansion that ended in February broke the record for longest uninterrupted expansion in the history of the United States. COVID-19 abruptly ended the streak (no, I hadn’t seen it coming), creating the worst economic and jobs crisis since the Great Depression.

The Cumberland River: The Nashville skyline frames the Cumberland River which connects downtown to East Nashville.

Sadly, this recession has hit small businesses much harder than large businesses, as mandatory closings and stay-at-home orders decimated Nashville’s vibrant consumer services and hospitality sectors. Unfortunately for all of us, a full national economic reopening will not take place until a vaccine arrives.

Until then, small business owners must either look to the opportunities, hibernate and conserve their energy, or completely re-imagine themselves and their businesses.

The opportunity lurks

I have never seen such a rapid and unexpected process of creative destruction and so much stress on vital Nashville entrepreneurs… I have also never seen so much deep opportunity for them.

In economics, the most powerful economic input is a person. Over the past 10 years, the greater Nashville area has added 500,000 people. Each of these Nashville immigrants generates an average of $ 60,000 in annual economic activity. This means that 60-70% of Nashville’s economic growth over the past business cycle can be attributed to population gains alone.

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Nashville has fantastic educational opportunities. Nashville has fantastic amenities. Nashville has a fantastic squad. Nashville has diverse and enviable hubs of employment in music, technology, healthcare and more. Nashville is bold and aggressive in investing in new ideas.

Oh, and for those of you complaining about traffic in Nashville, name a prosperous city that you respect that has no traffic.

Nashville remains well positioned

In short, Nashville offers a VERY vibrant, prosperous and vibrant quality of life at a VERY low tax rate. As workers and employers nationwide reflect on their purpose and where they belong, as use of virtual offices soars, as migration to tax jurisdictions accelerates, the magnetism of immigration of Nashville is only increasing.

David Waddell

The Nashville area is home to around 2 million people. If, and when, it is home to 3 million people, those souls will add an additional $ 60 billion to annual economic activity regardless of inflation or productivity gains.

The latest expansion lasted almost 11 years. The next one has just started.

As we move into the second half of 2020, I changed the title of my presentation to ‘Extension 2021, what are you going to do about it? ”

Yes, I know things are looking bleak right now. You’ve been hit especially hard by extreme weather, a pandemic, social unrest and more, but spring is coming. Now is the time to play offensive again as the headwinds turn to tailwinds.

Go be you, Nashville. Be bold.

David Waddell is CEO and Chief Investment Strategist of Waddell and Associates.

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