Manufacturing in Tennessee Runs 12% Below the National Cost Average

Tennessee's manufacturing cost index stands at 87.8 against a national 100 as of July 2026 — labor at 92.7 and industrial energy at 73.0. That places it third cheapest of 51 jurisdictions.

• composite (US = 100): 87.8
• labor: 92.7
• industrial energy: 73.0

The composite weights labor at 75% and industrial electricity at 25%, so Tennessee's position is mostly an energy story: its energy component indexes at 73.0 against the national 100. A discount of 12 points compounds differently across shops — a labor-heavy job shop feels the labor line, an energy-hungry process plant feels the kilowatt-hours.

For a site decision the index is the starting point, not the answer: freight to customers, workforce depth, and incentives move individual cases. The per-state page carries the underlying wage and electricity series this index is built from, both refreshed automatically.