Nashville Economy: Healthcare, Music, and the In-Migration Boom

The Nashville metro area — formally Nashville-Davidson-Murfreesboro-Franklin — is the largest metro economy in Tennessee and one of the fastest-growing large metros in the United States. It is the corporate hub of the for-profit hospital industry, the global capital of country music, and an increasingly common landing spot for in-migrants from California, Illinois, and the Northeast. Nashville's economy runs on healthcare administration, music and tourism, and a fast-rising professional-services and tech base.

This is a plain-English tour of how the Nashville metro economy works. For the state-level picture, see Tennessee Economy. For the country-level view, see The State of the U.S. Economy and the broader Economy hub and city cluster.

How big is the Nashville metro economy?

For example, recent metro GDP for Nashville-Davidson-Murfreesboro-Franklin has run around $200 billion, according to the Bureau of Economic Analysis. Metro population is roughly 2.1 million, per the U.S. Census Bureau. That makes the Nashville metro larger by population than 10 of the 50 U.S. states.

The biggest industries

A handful of sectors do most of the work in the Nashville metro economy:

• Healthcare administration — Nashville is the corporate capital of the for-profit hospital industry, with HCA Healthcare, Community Health Systems, Ardent Health, and a long list of management companies, billing firms, and health-tech startups headquartered in the metro. The local industry cluster is sometimes called "Healthcare Avenue."
• Music, tourism, and entertainment — country music's recording, publishing, and touring industry is concentrated on Music Row, and Lower Broadway, the Country Music Hall of Fame, and a steady festival calendar drive a major travel sector.
• Higher education — Vanderbilt University, Belmont, Lipscomb, Tennessee State, and Middle Tennessee State together anchor large faculty and staff workforces. Vanderbilt University Medical Center is one of the largest single employers in the metro.
• Auto manufacturing — Nissan's North American headquarters and assembly operations in nearby Smyrna, plus a deep supplier base across Middle Tennessee, employ tens of thousands of workers.
• Finance and back-office — a growing financial-services and operations cluster, plus the in-house tech and finance teams at the metro's hospital-management firms.
• Logistics and trade — the metro's central location and Nashville International Airport's expanding cargo footprint have driven warehouse and distribution growth along Interstates 40 and 65.
• Professional services and tech — consulting, accounting, legal, and software firms have grown sharply with in-migration and corporate relocations from higher-tax states.

Jobs and wages

Metro labor data is published by the Bureau of Labor Statistics Southeast region. For example, the Nashville metro unemployment rate has typically run a tick below the national average, helped by healthcare hiring, in-migration, and a steady tourism base.

Tennessee uses the federal minimum wage of $7.25 — among the lowest of any state — though most large Nashville healthcare, hospitality, and tech employers pay well above it. The latest figures are at the Tennessee Department of Labor and Workforce Development.

Cost of living

Nashville's cost of living tends to run a bit above the national average, with housing pressure that has grown sharply with in-migration. For example, recent HUD Fair Market Rent for a two-bedroom in the metro has run around $1,500 a month, with the Gulch, East Nashville, Green Hills, and Franklin higher and parts of Antioch, Madison, and the outer counties lower. Current county-level numbers are at HUD User.

The federal government tracks region-specific inflation data through the BLS Southeast region. Nashville's CPI has run a touch above the national average in recent years, partly because of fast rent growth.

Taxes in Nashville

Tennessee has no state income tax on wages, so Nashville residents pay no state or local tax on their paychecks — one of the headline reasons the metro has drawn so many transplants from California, Illinois, and the Northeast. Combined sales tax in Davidson County is 9.25%, made up of the state's 7% base plus city, county, and transit pieces — among the highest combined sales-tax rates in the country. Property taxes are moderate by U.S. standards. State rules live at the Tennessee Department of Revenue, and you can read more about how sales tax works in our glossary.

How the Nashville metro fits into the national picture

Nashville has been one of the U.S. economy's clearer "boomtown" stories of the past decade. Healthcare-administration growth, the country music industry's tourism pull, in-migration from higher-tax states, and a wave of corporate relocations have together driven population, wage, and housing-price growth that ran ahead of nearly every other large metro. The metro's broad industry mix and no-income-tax structure have made it unusually attractive to relocating firms.

The in-migration boom

Whether Nashville's growth continues at its 2010s pace depends on how fast the metro can build housing, expand transit, and absorb new arrivals without losing its character. Federal data on metro population growth lives at the U.S. Census Bureau, and metro employment is tracked by the BLS Southeast region.

A note on the numbers

Numbers in this article change every quarter — always check the latest from BEA, BLS, and HUD User for the most current data on the Nashville metro.