Service employment has grown rapidly in the nonmetro South in recent years, accounting for 87 percent of overall job growth in the 1985-1995 time period. This pace has been sustained in nonmetro areas that are adjacent to metro areas, as well as in more remote nonmetro areas that are not adjacent to metro areas. Retail, health, and producer services account for the largest share of service employment growth. In contrast to the United States as a whole, which experienced declines in manufacturing employment, the nonmetro South has had increases in manufacturing employment. This growth of manufacturing has stimulated the local service sector through multiplier relationships associated with the expenditure of income earned in manufacturing. Within the nonmetro South there has been more rapid growth east of the Mississippi River than in regions west of it. The role of services in southern nonmetro job growth must be recognized in economic development programs. Field-based research is needed to document whether job growth in services in the nonmetro South has been stimulated by growing levels of interregional trade in these services, as has been documented in other regions of the United States. There is also a need to document relationships between the growth of nonearnings income and services employment growth in the nonmetro South.

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