Tennessee's economy is based primarily on industry. Since the 1930s, the number of people employed in industry has grown at a rapid rate, while the number of farmers has declined proportionately. The principal manufacturing areas are Memphis, Nashville, Chattanooga, Knoxville, and Kingsport-Bristol. With the construction in the 1980s of a Nissan automobile and truck plant and a General Motors automobile facility, both in the area southeast of Nashville, Tennessee has become an important producer of transportation equipment. Since 1995, however, employment in Tennessee's manufacturing sector has fallen, and since 1999, total output from the sector has fallen (-3.2% between 1999 and 2001). The pace of job loss in manufactures accelerated in the 2001 national recession and slowdown, with 36,000 jobs lost during the year, 42% higher than any previous year. Manufacturing as a share of the state gross product fell from 21.5% in 1997 to 18.7% in 2001. The influx of new residents, from which Tennessee's economy benefited throughout the 1990s, fell to an eleven-year low with the fall in job growth in 2001. As of the fourth quarter 2002, the manufacturing jobs made up 17% of total employment in Tennessee, still above the national average of 13%. Income from agricultural products currently comes more from dairy and beef cattle and soybeans than from traditional crops, tobacco, cotton, and corn. Coming into the 21st century (1997 to 2001) the strongest growth in terms of contributions to state gross product has been in the various services sectors: output from general services increased 27.4%; from financial services, 29.5%; from the transportation and utilities sector, 27.4%; from government, 22.8%; and from trade, 17.8%.
In 2001, Tennessee's gross state product gross state product was $182.5 billion, the 18th largest among the states, to which general services contributed $39.7 billion; manufacturing, $34.2 billion; trade, $33.5 billion; financial services, $27.5 billion; government, $21.6 billion; transportation and public utilities, $15.4 billion, and construction, $8.2 billion. The public sector in 2001 constituted 12% of gross state product, the same as the average for all the states.