Area's economy sagged in 3rd quarter, index finds 20 of 24 cities showed declines

January 04, 1992|By David Conn

Baltimore's economy deteriorated further in the third quarter of last year, reversing a slight improvement the area showed in the second quarter.

The city's misfortunes were widely shared, as 20 of 24 metropolitan areas included in the Grant Thornton Index showed economic declines from July through September 1991.

The index is compiled each quarter by Grant Thornton, an accounting and consulting firm.

The index for the Baltimore area fell 0.3 points, to 108.1, in the third quarter, while the cumulative average for all 24 cities in the study fell 0.5 points. The Baltimore index had risen 0.5 points in the second quarter.

Morton Goldman, managing partner of Grant Thornton's Baltimore office, said the decline mainly was due to weakening nTC retail sales and non-farm employment. The other factors in the index are construction permits, business starts, business failures, factory hours and the national money supply.

Despite the poor third-quarter performance, Mr. Goldman said recent indicators showed an economy that at the very least had stopped declining. Worker productivity in last year's third quarter and factory orders in November improved slightly, according to reports released this week, and December retail sales were poor but not devastating, as many expected.

"I guess what this says is we're continuing to get mixed signals . . ." Mr. Goldman said. "We have no real basis to determine what the first quarter of 1992 is going to look like."

Of the 24 cities included in the study, only the economies of Denver, Cincinnati, Cleveland and San Francisco grew.

The second-worst decline in the quarter was seen in Washington, whose economy is linked in many ways to that of Baltimore. Compared with a year earlier, Baltimore's index fell 1.49 points, and Washington's declined 2.59 points. The 24-city average had a 1.52-point fall.

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