(Above) Photo by Rich Smith
Chattanooga Boasts Favorable Business Climate
If there’s one thing people can agree on, it’s that Chattanooga is good for business. Thanks to the city’s location, lifestyle, cost of living, attractions, pro-business government, and high-speed internet, Chattanooga is able to attract businesses from around the world.
In 2019, Business Facilities named Tennessee the state with the best business climate. It isn’t the first time either: Tennessee has been ranked No. 1 by the magazine three times in the past 12 years. Also in 2019, Paychex Inc. heralded Tennessee as the nation’s leader in small business employment growth. In the spring of 2019, annual exports for Tennessee manufactured goods were estimated to be around $24 billion.
The Scenic City is no exception when it comes to business growth. In 2019, unemployment for the Chattanooga, TN-GA metropolitan statistical area hit 2.8% – the lowest number in roughly two decades. Nearby Cleveland also saw its unemployment rate drop to 2.8%. Both marks surpassed the levels seen in the state of Tennessee and nationally. A survey from ManpowerGroup even puts Chattanooga as No. 1 on a list of the 100 largest metropolitan areas that have the best hiring outlook heading in to 2020.
A big factor in the record levels of unemployment and the positive outlook for job growth is the continued development of advanced manufacturing, largely driven by international companies choosing the Chattanooga area for their operations. Most notable has been the continued expansion of the Volkswagen Chattanooga plant. This year, the auto manufacturing giant announced it would expand operations to produce the Atlas Cross Sport for 2020 and become the home base for electric vehicles. Over $1.1 billion is to be invested by Volkswagen of America to expand operations, and an additional 1,000 direct jobs will eventually support the production of the 2022 electric vehicles.
Other notable expansions have been Wacker Chemie and Nokian Tyres. In Bradley County, Munich, Germany’s Wacker Chemie announced this year that it would be investing $150 million to build a new plant and add new positions to reach 700 total employees. Finland-based Nokian Tyres opened its North American tire production factory this year in Dayton, Tennessee, which will add 400 workers.
Closer to home, Osaka, Japan’s automotive paint and coatings producer Nippon Paint USA announced this year that it would invest over $60 million to build a LEED-certified site in Chattanooga that would add 150 jobs.
German-based ATN Hoelzel also announced that it would be locating its North American headquarters to Chattanooga. Offering quality robotics solutions, the company will expand its manufacturing operations at the Chattanooga location, which will result in 100 new jobs.
Did You Know?
In 2019, 13 Chattanooga companies were named to Inc.’s 5000 list of the country’s fastest-growing companies.
The Chattanooga Bakery (Photo by Emily Long)
Also adding jobs have been United States-based companies with established operations in the Chattanooga area. Among the most notable are Cleveland’s Mars Wrigley Confectionery, which broke ground on a $142 million investment and is expected to add approximately 80 jobs. Micronics Engineered Filtration Group and Team Title Services are also slated to add roughly 220 jobs as they develop the former Alstom site on Chattanooga’s riverfront. Zeus Industrial Products announced it would invest over $11 million in its Chattanooga operations and will add over 50 new jobs.
Adding to the economic progress for the Chattanooga area is the development of new businesses led by aspiring entrepreneurs. With the support of business incubators and accelerators, startups are able to flourish within the Scenic City. Among the most notable are the INCubator, the Enterprise Center, CO.LAB, and the Lamp Post Group.
Run by the Chattanooga Area Chamber of Commerce, the INCubator is the largest business incubator in the state and the third largest in the nation. The Enterprise Center helped put Chattanooga on the map as the first mid-sized city to establish a district dedicated to assisting startup businesses. CO.LAB, a nonprofit accelerator, offers resources and support for small businesses and high-growth potential startups, while the Lamp Post Group is a venture incubator helping take aspiring entrepreneurs’ ideas from planning stages through financial investment to culmination.
Supporting the economic progress of local businesses are public and private equity groups. Among those are Chattanooga Renaissance Fund, Tenth Street Capital, The JumpFund, FourBridges Capital Advisors, Dynamo Ventures, BrightBridge, and River Associates Investments, to name a few.
The support of city, state, and private organizations was noticeable in 2019, when the elite Techstars Austin accelerator program chose more new companies from the Scenic City than any other town in the United States. Techstars offers financial assistance and national recognition to new businesses with the greatest potential for success. Supporting the growth of new business startups, the Scenic City has been recognized for the last five years by SmartAsset as having the lowest startup costs.
Given Chattanooga’s strategic location to water, rail, and interstate systems, the city has long been a hub for logistics services of all types, whether that be third-party logistics companies or delivery organizations. Today, the city continues to experience economic growth behind the success of logistics companies. Out of the 13 Chattanooga companies named to Inc. 5000’s 2019 fastest-growing companies, eight of them are in the logistics industry. Top logistics providers such as U.S. Xpress, the nation’s fifth-largest, asset-based truckload carrier by revenue, and Covenant Transport, a national leader in expedited truckload freight, are both headquartered in Chattanooga, and Kenco Group, Arrive Logistics, and Coyote (now a part of UPS) are also located in the area.
In 2016, Dynamo, a logistics accelerator, put Chattanooga on the radar as an up-and-coming company for logistics technology, and FreightWaves, a transportation and logistics data and content provider, has made an investment in the community by adding over 250 jobs.
Over the last decade, Amazon has opened multiple distribution facilities in the area, and FedEx expanded in 2017 by opening a second distribution center near Enterprise South Industrial Park. Third-party logistics provider Arrive Logistics agreed to add 500 new jobs in the area over the next several years. Kenco Group is opening a 10,000-square-foot Supply Chain Innovation Test Lab at its Chattanooga headquarters, which will serve a team of innovation specialists as they work to create potential supply chain management solutions.
Another very important industry for the state of Tennessee and the Scenic City is tourism. In 2018, tourism for the Chattanooga area reached $1.1 billion. The industry entertained over 5 million visitors, employed over 8,800 people in the Chattanooga area, and generated $90 million in state and local taxes, of which $12.5 million went to Hamilton County schools. With the increase in tourism, new hotels, including a number of boutique hotels, have opened in in recent years, and more are slated to come online in the near future.
Complementing businesses and services throughout the area is EPB’s fiber-optic network. From leading medical research to advanced manufacturing to technology startups, EPB’s 10-gig – or 10,000 megabits per second – service provides the platform for information of all types to be easily managed in the most efficient manner. First established in 2010, the gigabit internet speed thrust Chattanooga into the international spotlight, and in 2015, EPB launched a 10-gig service called NextNet, which is known as the fastest internet service in the world.