Major Industries and Commercial Activity
At the center of a major distribution network, Memphis works from a broad economic base as it continues to diversify its employment opportunities. Historically a trading center for cotton and hardwood, Memphis is the headquarters for major manufacturing, services, and other business concerns.
The city is home to three Fortune 500 company headquarters: FedEx, AutoZone, and International Paper. FedEx began its operations in 1973, with 14 small aircraft delivering packages from Memphis International Airport. Today, FedEx averages more than 6 million shipments per day, and serves more than 220 countries and territories. AutoZone opened its first Auto Shack in Forrest City, Arkansas, in 1979; the company is now a leading auto parts retailer, with more than 3,400 stores nationwide. International Paper, organized in 1878, is the largest paper and forest products company in the world, with operations in more than 40 countries.
Memphis's economy is diverse. Services centered in Memphis include banking and finance (First Tennessee, National Commerce Bancorp, Union Planters); real estate (Belz Enterprises, Boyle Investment Co., and Weston Co.); nonprofits including the world's largest waterfowl and wetlands conservation organization (Ducks Unlimited); and a restaurant chain (Backyard Burgers). Science and technology business is very well represented in Memphis; Brother Industries USA, Buckman Laboratories, Medtronic Sofamor Danek, Morgan-Keegan, Sharp Manufacturing of America, Smith & Nephew, and Wright Medical Technologies all have headquarters there. Memphis is considered a mid-South retail center and an attractive tourist destination. Its early and continued role as a major cotton market makes agribusiness an economic mainstay in Memphis. Forty percent of the nation's cotton crop is traded in Memphis, home of three of the world's largest cotton dealers: Dunavant Enterprises, Hohenburg Brothers (now Cargill Cotton), and the Allenberg Company. Memphis is important in other areas of agribusiness. The city has long been established as a prime marketing center for hardwood, as well as wood and paper products. Memphis concerns are also major processors of soybeans, meats, and other foods. Enhancing Memphis's position at the center of agribusiness is Agricenter International, an $8 million, 140,000 square foot exhibition center for agricultural exhibitions, experimentation, and information exchange. It brings together the most technologically advanced methods of farming and farm equipment available in one location. The exhibition hall, where independent farm-related companies (chemical concerns, irrigation businesses, farm management companies, etc.) lease space, is totally computerized, allowing farmers and consumers to ask specific information of the computer and receive specific answers. The facility also includes about 1,000 acres of farmland, 120 acres of field displays, and a 600-seat amphitheater. Agricenter, a nonprofit entity that operates on a management contract with the Shelby County Agricenter Commission, was built amid 2,000 acres of old Shelby County penal farm land, in the eastern section of the county about 30 minutes from downtown Memphis.
Memphis business activities are facilitated by the city's Uniport Association, which coordinates a Foreign Trade Zone, and river, air, rail, and road transportation services into a top-ranked distribution network.
In the late 1990s Memphis made a name for itself as a center for movie making. Movies filmed there since then include Mystery Train, Great Balls of Fire, The Firm, The Client, The People Vs. Larry Flynt, A Family Thing, The Rain-maker, Cast Away, 21 Grams, Forty Shades of Blue, and Walk the Line.
Items and goods produced: chemicals, machinery, clothing, foodstuffs, electronic equipment, pharmaceuticals, cosmetics, ceiling fans, smokeless tobacco, gift wrap, bubble gum
Incentive Programs—New & Existing Industries
Think Memphis: Partnership for Prosperity is a public-private initiative whose goal is to make Memphis and Shelby County more globally competitive and attractive to businesses looking to relocate and expand. The program is in part a continuation of Memphis 2005, an economic development program begun in 1996 that aimed to diversify the economy, raise the per capita income, generate 12,000 net new jobs annually, increase minority and woman-owned business development, and lower the crime rate. Memphis 2005 has been credited with Memphis' average nonresidential capital investment of more than $1 billion a year, 10,000 net new jobs annually, and increased per capita income above the national average. Further, Think Memphis aims to enhance the economic vitality of the Memphis area through collaboration with its chambers of commerce, local and state governments, and other organizations; and aims to attract 10,000 newcomers to the region, and encourage Memphis residents to remain here, through a ten-year, multi-million dollar marketing effort.
Tennessee is a right-to-work state and its overall state and local tax burden is among the lowest of all 50 states. Tennessee has no personal income tax on wages or salaries. Finished goods inventories are exempt from personal property tax, and industrial machinery is totally exempt from state and local sales taxes. Manufacturers receive other tax exemptions under specified circumstances and reduced property assessments. State-administered financial programs for businesses include: the Small and Minority-Owned Business Assistance Program, currently being developed by the state Treasury Department and expected to provide assistance to small and minority-owned businesses through loans, technical assistance, and program services; the Small Business Energy Loan Program, which helps qualified Tennessee-based businesses upgrade their level of energy efficiency in their buildings and manufacturing processes; the FastTrack Infrastructure Program, which assists in the funding of infrastructure improvements for businesses locating or expanding in Tennessee; and the FastTrack Training Services Program, which helps companies provide training for their staff.
Job training programs
The state of Tennessee provides funds for eligible projects that can offset costs that are incurred during the training process. Each project is considered separately based on its economic impact to the state. This program does not include wage payments to persons involved in the training program. Vocational training in Memphis is available through the Tennessee Technology Center, State Technical Institute of Memphis, Mid-South Quality Productivity Center, Southeast College of Technology, and through the public schools.
In January of 2003, Cannon Center, a world-class performing arts center at the north end of Main Street, opened its doors. On the South end, Peabody Place Entertainment and Retail Center, a multifaceted entertainment center, opened in fall of 2001. This city within a city attracts more than 8 million visitors annually; it encompasses three blocks of Beale Street, and includes the Peabody Hotel, the Orpheum Center, Fed Ex Forum (home of the NBA Memphis Grizzlies) and Autozone Park (home of the AAA Memphis Red-birds), plus 80 restaurants. A $30 million Westin Hotel is being built next to the Fed Ex Forum, replacing a parking lot. Autozone park is a world-class baseball stadium that has been credited with stimulating nearby developments ranging from restaurants, night clubs, retail developments, and commercial and residential projects. The major one is Echelon at the Ballpark, a residential/business facility whose amenities include nine-foot ceilings, pass-through fireplaces, balconies with a ballpark view, a fitness center, and business facilities. In 2005 projects include the renovation of the Kress Building (listed in the National Historic Register) into an annex of the adjacent Marriot hotel, and renovation of the Lawrence Building into a luxury condominium with unique "live/work" areas on the first floor for professionals who work at home.
Economic Development Information: Memphis Chamber of Commerce, 2969 Elmore Park Road, Memphis, 38134, telephone (901) 372-9457. Tennessee Department of Economic & Community Development, 312 Eighth Avenue North, Nashville, TN 37243; telephone (615)741-1888
Memphis's Uniport combines a Foreign Trade Zone with river, air, rail, and road facilities to make Memphis one of the nation's most important distribution centers. The Memphis River Port, which connects the city to 25,000 miles of interconnected inland waterways, is the second largest inland port on the Mississippi River, and the fourth largest port in the nation. There are three still-water harbors, which include public terminals, loading facilities, grain elevators, and intermodal connections.
Memphis International Airport is less than 15 minutes from most business centers in the area and serves major airlines and commuter lines. One of the nation's fastest-growing airports, it is often the site of expansion projects, including improvements to cargo facilities. It is the world's busiest cargo airport because of FedEx, UPS, and other air freight companies that move approximately 2.4 million tons of cargo annually.
Transport Topics, a national newspaper for the trucking industry, has called Memphis "an intermodal transportation hub like no other." The area is served by over 300 common carriers, including all major truck lines. Over 100 terminals offer direct services to all 48 contiguous states, as well as to Canada and Mexico. The presence of five Class I rail systems makes Memphis a center for world distribution in the new economy; Memphis is one of only three U.S. cities served by five or more such systems. Eight federal highways, three interstate highways, and seven state highways connect the Memphis trucking industry with both the rest of the nation and with other vital forms of transportation.
Labor Force and Employment Outlook
Memphis boasts a diverse work force, prepared by nationally recognized schools and training programs. Memphis ranks high among business analysts for low taxes, competitive wages, and cost of living.
Memphis has seen substantial job growth in recent years; its Memphis 2005 program is credited with adding an average of 10,000 new jobs annually during the years 1996 to 2004. Currently, the high-tech bio and agri-research and health-related industries are thought to have particularly impressive growth potential, and the city's chamber of commerce seeks to attract technically skilled and creative workers to contribute leadership and manpower to those and other areas.
The following is a summary of data regarding the Memphis metropolitan area labor force, 2003–2004 annual averages.
Size of nonagricultural labor force: 616,400
Number of workers employed in . . .
construction and mining: 26,400
trade, transportation and utilities: 169,300
financial activities: 33,000
professional and business services: 72,200
educational and health services: 71,700
leisure and hospitality: 67,700
other services: 24,400
Average hourly earnings of production workers employed in manufacturing: $14.96
Unemployment rate: 6.1% (December 2004)
Cost of Living
The city of Memphis has a relatively low cost of living in comparison to other major cities in the country. The following is a summary of data regarding key cost of living factors for the Memphis area.
2004 (3rd Quarter) ACCRA Average House Price:$194,150
2004 (3rd Quarter) ACCRA Cost of Living Index: 90.7 (U.S. average = 100.0)
State income tax rate: Limited to dividends and interest income
State sales tax rate: 7.0%
Local income tax rate: None
Local sales tax rate: None; Shelby County sales tax is 2.25%
Property tax rate: In October 2003, the tax rate was $3.23 per $100 of property assessment. Property assessment is 25% of the property appraisal for residential real estate property.
Economic Information: Memphis Chamber of Commerce, 2969 Elmore Park Road, Memphis, 38134; telephone (901)372-9457.
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