Experts predict mild recession for Maryland

February 21, 1991|By Frank D. Roylance | Frank D. Roylance,Evening Sun Staff

The ongoing economic slowdown in Maryland should be mild and brief compared with the 1982 recession, according to a panel of regional forecasters.

Maryland's economy "will begin its upturn during the summer," said Robert N. Schoeplein, research director for the Maryland Department of Economic and Employment Development.

"The only concern I have is what the rate of recovery will be," he said.

He warned, however, that Marylanders should expect to continue to hear bad news about the state's economy throughout the summer because economic statistical reports lag several months behind events.

Schoeplein spoke yesterday at a "policy issue briefing" sponsored in Baltimore by the Johns Hopkins University Institute for Policy Studies.

He was joined in his optimism by Charles E. Boyd, forecasting supervisor for the Baltimore Gas & Electric Co., and Charles W. McMillion, senior fellow at the Institute for Policy Studies.

Boyd said the indicators he watches show no trends comparable to those during the 1982 recession. Industry was "a little better prepared for this recession," and had trimmed both employment and inventory in anticipation of the slowdown, he said.

Although growth in the number of residential utility customers and new building permits has been slowing since 1987, he said, "it hasn't come back down to the levels seen in the early 80s."

BG&E is adding new residential customers at the rate of 12,000 to 13,000 units a year, compared with only 5,000 new units in 1982.

"We are seeing quite a reduction in the number of commercial customers, but it's not as bad as it was leading into other recessions," Boyd said.

Electric sales, measured in megawatt hours, have seen "some leveling, but it's not very significant," he said.

"The gist of all this is we really see a mild recession, ending by the middle of the year. . . much milder than the 1982 recession," Boyd said.

Boyd said an informal panel of executives from BG&E, the Chesapeake and Potomac Telephone Co., Maryland National Corp. and CSX concluded last month that 1991 would see little positive growth, or more likely some decline in the gross national product. This would be followed by slow growth of perhaps 2.8 percent in 1992.

The "downside" risks, however, are greater than the "upside" risks, Boyd said. He said the executives agreed that there is danger of a deeper recession driven in part by unforeseen events in the Middle East.

Yesterday's panel also expressed concern for the future of Baltimore city, which they described as "the hole in the doughnut" of Maryland's economy.

McMillion said that, while six years of positive job growth in Baltimore before 1990 provided an example to the world for the revival of old, industrial cities, the city's job growth was just a third of that in neighboring subdivisions.

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