Mixed bag for state's economy Recovery from recession has been uneven, according to a Federal Reserve report.

August 08, 1991|By Nicole Weisensee | Nicole Weisensee,States News Service

WASHINGTON -- Maryland's recovery from the recession has been uneven, with declines in retail sales offsetting gains made in manufacturing orders, according to a report by the Federal Reserve.

Nationwide, the Fed's latest survey of business conditions in the country, released yesterday, showed national economic conditions continuing to improve, but at a "slow, uneven pace."

However, a Maryland state official disputed the Fed's mixed review of the state's recovery, noting that the Fed includes Washington, D.C.; Virginia; North Carolina; and South Carolina in the same district as Maryland.

"I feel quite strongly that their cautiousness regarding the slow, uneven recovery for the district as a whole is not reflected in the numbers that we have for Maryland," he said, adding that the recovery in the state has been under way for the past four to five months.

Businesses have been expanding their payrolls and retail sales have been increasing, he said.

"I'm not painting a brilliant sunrise, but what I am saying is that, through real hard work and conscious efforts of Maryland businesses, the economy is expanding," he said.

The report polled retailers in the Fed's fifth district who said that, while wages and prices rose slightly, they experienced declines in sales as well as in inventories, employment and capital expenditures.

However, the respondents were "optimistic about their business outlook for the next six months," according to the "beige book" prepared by the Federal Reserve. The report is based on a survey of the Fed's 12 regional banks.

The report was released one day after the nation's central bank, in an effort to spur the economy's sluggish recovery, lowered from 5.75 percent to 5.5 percent the interest rate that banks charge to borrow money from each other.

A majority of manufacturers also predicted an upswing in national and regional business conditions over the next few months, as well as increases in their own shipments, new orders and prices.

When manufacturing and retailing respondents in the region were asked by the Fed if they thought the recession was over, there was a divided response.

"Nearly half the manufacturers believed the recession had bottomed out -- both for themselves and for the economy as a whole," the report said.

"Retailers had mixed feelings about whether general economic recovery had begun," the report continued.

"Almost half believed that the retail sector was still in a downturn, while less than a third thought the downturn had ended."

The Baltimore port experienced an increase in exports and a decrease in imports during June -- down from May of this year and June of last year.

Exports were expected to increase faster than imports throughout the remainder of the summer and fall, according to the Fed.

"Those surveyed thought that the declining dollar had boosted exports," the report said, adding that coal exports rose at the Baltimore port.

The housing market remained steady during June and the first half of July, according to the report.

Finally, the report asesed agricultural conditions in the region.

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