Building for the Future

January 08, 1991

In the midst of the worst slowdown this country has seen in years, Maryland's economy is faring better than the nation as a whole. Statewide unemployment registered 5.3 percent in November compared with 5.8 percent nationwide. Retail sales rose 4.8 percent last year against a national increase of 3.7 percent. Even in construction, where Maryland's fortunes have declined markedly, the state is ahead of the national average.

Yet even in Maryland, the situation is hardly glowing. Virtually every locality is attempting to cope with lower tax receipts; many are facing deficits and possible layoffs. In the private sector, some of the region's largest employers are faltering. The state's significant defense-industry sector is feeling the effect of budget cuts unrelated to the Gulf crisis. Small, deserving businesses are feeling the credit pinch as a deregulated banking industry swings from excess to over-regulation.

Still, the traditional strengths that have helped Maryland weather past downturns have not disappeared: economic diversity, a highly trained work force, close proximity to the federal government and some of the best transportation and water resources in the country. Recessions come and go. Economic assets such as these do not.

This stage of the cycle finds Maryland at a crossroads. Traditional indicators offer the prospect of a recovery: Inflation is low, inventories relatively lean. Most area stocks have bottomed out. The threat of war, higher oil prices and the flagging health of the region's financial sector are nonetheless wild cards that could send the region deeper into recession.

Maryland's economy will face painful adjustments. There will be vTC difficult choices to make in the months to come. We must not, however, become so embroiled in short-term problems that we lose sight of long-term strengths. These, and the inevitable economic recovery, offer ample incentives to preserve and build upon Maryland's formidable assets.

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