WASHINGTON -- Business confidence in the Baltimore-Washington area is strengthening, but there is caution about the creation of new jobs, according to a survey of 700 local executives.
Overall, 45.3 percent of regional businesses reported better operating conditions over the past six months. With confidence for each of the next four quarters increasing, an optimistic trend is clear.
The survey was taken by the Washington/Baltimore Regional Association, a partnership of the Greater Washington Board of Trade and Maryland Economic Growth Associates. It was the first survey of its kind by the group and could become a regular sounding of local business sentiment.
It found that a clear majority, 54.3 percent, of the executives, expect better times by September but that less than half of that number foresee any new hiring before then.
Baltimore executives found the past six months less reassuring than their Washington colleagues did. Only 42.6 percent of the Baltimoreans surveyed thought that conditions were better, compared with 48.6 percent of the Washingtonians. They were also less confident about prospects for the next six months: 47.3 percent expected improvement in Baltimore against 53.2 percent in Washington.
But when asked to assess the situation a year from now, Baltimore's executives found the prospects more reassuring. No fewer than 80.6 percent said they expected improvements, against 78.6 percent in Washington.
Edmund B. Cronin Jr., chairman of the Washington/Baltimore Regional Association, explained: "Baltimore was not as dramatically affected in the downturn as early as Washington. Indeed, I don't think it [was] as deeply affected overall. In consequence they were lagging coming in and so they will probably lag coming out."
Job prospects are expected to be best in banking, where loan activity is likely to increase, and in architecture and engineering, the initial beneficiaries of revived construction. One-third of the regional executives in those professions expected recruiting, compared with one-sixth in the real estate business.
The findings are in line with the national pattern of slowly growing confidence alongside a cautious expectation of a reawakened labor market this summer or fall.
Exports have underpinned the weak national recovery, and the survey found that the number of local businesses involved in exports has increased to 39 percent from 32 percent five years ago.
Another factor cushioning the area from the full impact of the recession has been the heavy involvement of the federal government. "It is still the engine that drives this region," Mr. Cronin said.
While national defense spending is being cut, local defense spending actually increased to $9.184 billion last year from $9.023 billion in fiscal 1990.
Federal non-defense spending in the Baltimore-Washington area increased to $8.287 billion in 1991 from $5.237 billion the year before.
Hoteliers, manufacturers and bankers reported the strongest improvements over the past six months and were also the most bullish about prospects for the next 12 months.
The recession has had its share of benefits, however, according to the survey.
Asked to identify "opportunities" presented by the recession, the employers listed streamlining and discharging marginal workers; increased market share because of the elimination of competitors; hiring good employees at competitive salaries; and developing new markets, particularly overseas.