KNOXVILLE— Tennesseans are in for the long haul and likely won’t see significant improvements in the state’s economy until 2013.

Many aspects of the economy, however, are showing some gains in the short-term, which is good news particularly in the areas of employment, personal income, sales tax, and state tax revenue, according to a University of Tennessee, Knoxville, report released today.

However, the housing market will continue to struggle, according to the fall 2011 Tennessee Business and Economic Outlook. The economy could also face a number of downside risks in the months ahead, including the looming financial crisis in Europe.

The study, prepared by the UT Center for Business and Economic Research, predicts the trajectory of the state and national economies by examining several economic and fiscal factors.

“Economic growth has slowed but has not stalled,” wrote Matt Murray, CBER associate director and author of the study. “A slight pickup in growth is anticipated in the third and fourth quarters, but annualized growth will come in at a disappointing rate for the year as a whole. The outlook for 2012 is only slightly better.”

Tennessee’s short-term economic outlook has been downgraded because of slower growth prospects nationally and internationally.

Here are some major themes in the fall report:

Employment

Tennessee’s unemployment rate will surpass the national rate in the short-term.

It will average 9.8 percent in the third quarter and 9.7 percent in the fourth. The 2012 projection is 9.4 percent. It’s not expected to dip below 9 percent until 2013.

The nation’s unemployment rate was officially 9.1 percent in August, which was an improvement over the 9.6 percent rate in 2010.

The national unemployment rate will also remain above 9 percent this year and next year.

Tennessee’s nonfarm employment is expected to be up 0.8 percent this year and 1.0 percent in 2012, down slightly from expectations in the spring.

Manufacturing will enjoy short-term employment gains particularly in the durable goods sector. This is largely due to steady improvement in the transportation equipment industry, including new jobs created by Volkswagen. However, manufacturing will not regain all of the jobs lost during the course of the recent recession.

Nondurable goods will decline 0.2 percent this year. The textiles and printing industries will see “especially large losses,” Murray wrote. Plastics and rubber, on the other hand, will enjoy healthy growth benefiting in part from the pickup in transportation equipment production.

Most sectors of the economy outside of manufacturing are expected to see job gains in the quarters ahead. Exceptions for 2011 include retail trade, information, and government, including federal, state, and local employment.

In 2012, retail trade and the government areas will likely continue to lose jobs while other sectors expand.

Nationally, “employment is not only below pre-recession levels but below the level of employment that prevailed in 2000,” Murray wrote.

U.S. payroll employment is expected to grow 0.9 percent this year and 1 percent in 2012. However, employment will not return to 2008 levels even by the end of 2013.

Tax collections

Tennessee’s sales tax revenues for the July 2010 through March 2011 time period fared better than the southeastern average.

Total tax revenues grew 6.3 percent compared to 2010, and sales tax revenues grew by 4.6 percent. While both numbers were above the southeastern average, they were below the national average.

The second quarter of 2011 compared to the same period in 2010 showed positive growth for Tennessee. The total growth was 3.3 percent over 2010, and sales tax growth was up 5 percent. Tennessee’s sales tax grew more than the southeastern average in the second quarter of 2011 over 2010.

This is the second consecutive August with positive sales tax revenue growth which moves collections to just $9.5 million below August 2007.

State governments are finally seeing some relief from the recession. Recovery, in terms of tax revenue growth, is “quite strong,” Murray wrote.

Year-over-year growth in the second quarter of 2011 compared to 2010 was the strongest states have seen since 2005. It was 11.4 percent. The first and second quarters of 2011 show continued state tax revenue growth throughout the nation. Though revenues have been positive for six consecutive quarters, collection levels are still below pre-recession figures, including Tennessee.

Local governments are not as lucky.

Due to weak property tax revenues, which account for more than a quarter of local tax collections, state and local collections have seen losses for two consecutive quarters nationwide. Compared to the same quarter in the previous year, property taxes fell by 1.7 percent in the first quarter of 2011 and 3 percent in the fourth quarter of 2010, reflecting the declines in property values during the past two years.

“Unfortunately, the worst is not likely over for local governments,” Murray wrote.

Personal income

Tennesseans will have a bit more money this year.

Personal income is expected to grow 4.6 percent in 2011, thanks in part to the temporary two percentage point reduction in the Social Security payroll tax.

Rent, interest, and dividend income should see strong growth of 5 percent.

A 4.3 percent income growth rate is expected in 2012, one more illustration of slow economic expansion.

Nationally, nominal personal income is expected to increase 5.3 percent in 2011, but it will not be evenly distributed across all socio-demographic groups.

Housing market

Home values in Tennessee and the nation are expected to keep falling through 2011. Existing home sales will remain low and national home prices will drop 5.2 percent for the year, the report states.

“Foreclosures are expected to be up in 2011 after a respite in 2010,” Murray wrote. “The depressed state of the housing market will limit job creation in the construction, building material, and home furnishing sectors, while putting downward pressure on the sales and property tax bases of states and localities.”

Investment

Murray called nonresidential fixed investment “an important bright spot” for the national economy.

Following 4.4 percent growth in 2010, investment spending is expected to rise 7.8 percent this year and 4.3 percent next year. Equipment and software investment will show broad-based gains. Investment in structures, however, will see only 3.2 percent growth in 2011 and a 3.5 percent setback in 2012.

“This weak performance for structures is nonetheless marked improvement over the double-digit declines in 2009 and 2010,” Murray said.

To see the report in its entirety, visit http://cber.bus.utk.edu/tefs/fall11.pdf.

The report was financed by the state Department of Finance and Administration, the state Department of Economic and Community Development, the state Department of Revenue, the state Department of Labor and Workforce Development and the Appalachian Regional Commission.

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The University of Tennessee announced Sunday the hiring of Missouri State University head coach Cuonzo Martin (pronounced CON-zoe) as the Vols' 18th head men's basketball coach. He will be introduced at a press conference tomorrow (Monday, March 28) at 2:30 p.m. ET at the Ray Mears Room at Thompson-Boling Arena.

The 39-year-old Martin, who is a graduate of Purdue University, posted a 61-41 (.598) record in three seasons at Missouri State from 2008-11. This season's Missouri Valley Conference Coach of the Year, Martin's 2010-11 Bears team finished 26-9 and won the school's first-ever Missouri Valley Conference regular season championship. The team's 15-3 mark in MVC games set a school-record for conference wins in one season.

"Cuonzo is among the most promising young coaches in the game, and we are excited about the coaching ability, toughness, and energy that he brings to our program," Tennessee Director of Athletics Mike Hamilton said. "He has a proven track record of success as a head coach at Missouri State and an assistant at Purdue as well as an outstanding career as a college basketball player. His Missouri State program improved from 11 wins to 26 in just two seasons, and they won the regular season conference championship this year."

"Cuonzo has an inspiring personal story, and we look forward to his impact on Tennessee basketball. We welcome Cuonzo, his wife Roberta, their sons Joshua and Chase, and their daughter, Addison, to the Tennessee family."

Martin is also a finalist for two national coaching awards this season: the Hugh Durham National Coach of the Year Award, presented annually to the top mid-major coach in Division I college basketball, and the Ben Jobe Award, presented annually to the top minority head coach in Division I. Both awards are to be presented during Final Four weekend.

On March 26, 2008, Martin was introduced as the Missouri State head coach after spending eight years as an assistant coach at his alma mater under head coaches Gene Keady and Matt Painter. After finishing 11-20 in his first season with the Bears in 2008-09, the team improved 13 wins to a 24-12 finish and the CollegeInsider.com postseason tournament title in 2009-10, tying Kansas for the national lead in home wins with 19.

Martin's Missouri State teams were a combined 36-3 at home over the last two seasons, and the three home losses were by a combined total of five points.

A two-win improvement this season (26-9) means Martin's last two Missouri State squads have averaged 25 wins, posting a combined record of 50-21 and a .704 winning percentage. In addition, after a 3-15 finish in the MVC in 2008-09, the Bears improved to 8-10 in 2009-10 and 15-3 in the league in 2010-11.

Through all NCAA games of March 25, the 2010-11 Missouri State squad ranked seventh nationally in turnovers per game at 10.3 and also led the MVC in 3-point shooting (.376, 39th nationally) and assist-to-turnover ratio (1.28, 27th nationally) while ranking second in winning pct. (.745, 30th nationally), scoring offense (69.8 ppg, 140th nationally), and scoring margin (6.7, 60th nationally). Missouri State played in the MVC Tournament as the No. 1 seed and fell to Indiana State in the MVC Tournament Championship Game. The Bears played in the NIT this year, defeating Murray State in the first round before losing in the second round at Miami (Fla.).

The 2009-10 MSU team led the MVC in scoring and assist-to-turnover ratio and ranked in the top 25 nationally in turnovers per game (11.3).

Martin was a standout player for the Boilermakers as a collegian, scoring 1,666 points in 127 career games. During his four playing seasons, Purdue posted a 90-37 record, including a combined 54-12 mark in his last two seasons and two Big 10 titles in 1994 and 1995. He made 45.9 percent of his 3-point attempts (179-for-390) over his junior and senior seasons and was an 80 percent free-throw shooter.

During his senior season of 1994-95, he averaged 18.4 points per game while leading Purdue to the second of three consecutive Big 10 championships, earning First Team All-Big Ten honors. Broadcaster Dick Vitale also named him to his All-Defensive Team in 1995.

Martin set the Purdue school record for 3-pointers made in a single game, draining eight in an NCAA Tournament Sweet Sixteen contest against Kansas on March 24, 1994, a game hosted at Thompson-Boling Arena. The Boilermakers won that game to advance to the Elite Eight. Martin's record still stands and was subsequently equaled by Robbie Hummel against Ohio State on Jan. 12, 2010.

Martin was selected with the 57th overall pick in the 1995 NBA Draft by the Atlanta Hawks and played professional basketball for four years, including NBA stints with the Milwaukee Bucks and the Vancouver Grizzlies. He also was the team captain and leading scorer with the Grand Rapids (Mich.) Hoops of the Continental Basketball Association for three seasons and was the leading scorer for the Felize Scandone team in Avellino, Italy in 1997.

In November of 1997, Martin was diagnosed with Non-Hodgkin's Lymphoma and returned to the United States for treatment of a malignant tumor between his heart and lungs. He received his last treatment on April 20, 1998, and is now in full remission. He has used his courage and experience with the disease to promote awareness of cancer research and support cancer charities.

In 2008, Martin served as a spokesman for the inaugural Purdue Center for Cancer Research Challenge for cancer research, which attracted more than 1,000 runners and walkers to Ross-Ade Stadium and raised more than $30,000 for cancer research at Purdue. In his honor, the Cuonzo Martin Challenge Award was established.

Cuonzo LaMar Martin was born Sept. 23, 1971, in East St. Louis, Ill. He and his wife, Roberta, have two sons, Joshua and Chase, and a daughter, Addison.