Forbes Magazine recently ranked Knoxville, Tennessee #5 on the 2007 Top 10 Best Places to Live and Work in America.

The South Rises Again

Riding strong job growth and low business costs, the Southeast outshines the competition. by Kurt Badenhausen

The news on the economy in recent months has been uninspiring. The subprime lending mess threatens to accelerate the housing slowdown. Gas prices are at their highest in eight months. Gross domestic product growth this year is expected to be less than 3% for the first time since 2003. But one part of the country consistently manages to produce strong economic growth and still keep costs down. For the second straight year the Southeast placed 5 metros in the Top 10 of our Best Places for Business and Careers. While most economies in the West have also outperformed their peers in the Northeast and Midwest over the past four years, living costs there have risen dramatically. Housing prices in Phoenix, spurred in part by easy lending, are up 57% in the past two years, knocking it off our Top 10.

For this year's ranking we relied on economic research firm Economy.com (owned by Moody's (nyse: MCO - news - people )) for its indexes on business and living costs. It also supplied five-year historical figures on job and income growth, as well as migration trends. Other data used in the rankings came courtesy of Portland, Ore. researcher Bertrand Sperling. He considered the education of the workforce in each metro area, as well as such quality-of-life issues as crime rates and cultural opportunities.

5 . Knoxville, Tennessee

Population: 662,000
Job Growth: 1.6%
Income Growth: 2.6%
Big Employers: U.S. Department of Energy, Covenant Health, University of Tennessee, Wal-Mart Stores (nyse: WMT - news - people ), St. Mary's Health System.

The area is home to 11 colleges that spit out 8,000 graduates a year. Last year food-service distributor Sysco (nyse: SYY - news - people ) announced plans to invest $40 million and hire 300 people for a new complex. One draw: business costs that are 14% below the national average.

For more details on the 200 largest metro areas and a ranking of 179 smaller ones, visit

www.forbes.com/bestplaces

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