Md. economy improved, Fed says No dramatic end to stagnation seen

September 24, 1992|By Ian Johnson | Ian Johnson,New York Bureau Staff Writer Gilbert A. Lewthwaite contributed to this article.

NEW YORK -- Maryland's economy showed "some signs of improvement" over the past two months but no dramatic end to the current stagnation was in sight, according to a survey released yesterday by the regional Federal Reserve Bank.

The report also evaluated the national situation, painting a modestly upbeat assessment of business conditions. It will be the last report by the Fed before the Nov. 3 national elections.

While most indicators for the Fed's fifth district, which includes Maryland, moderately increased over the past two months, tourism declined because of bad weather, the poor economy and a late Labor Day. In general, however, the report showed stability.

"Past studies have been very stable, without a great deal of optimism or pessimism. This one leans more toward optimism," said Robert F.Graboves, a researcher with the Federal Reserve Bank of Richmond, Va., which heads the mid-Atlantic district.

The survey, known as the "beige book" for the color of its cover -- and these days possibly also its tone -- analyzes opinions and expectations for consumer spending, manufacturing, ports, vTC tourism, finance, real estate and agriculture. It is released the day before the Fed's Open Market Committee meets to decide monetary policy.

Compared with most of the other districts surveyed, the fifth district was one of only five that reported "modestly improved conditions." Two of the 12 Fed districts, Chicago and San Francisco, reported downturns, while the others had only slowly expanding activities.

Mike Conte, who heads the Regional Economic Studies Program at the University of Baltimore, said his index of Maryland's leading economic indicators also showed slow growth and relative stability.

"The Fed's outlook is consistent with how we see things. It will be steady, which is not to say a recovery," Mr. Conte said.

One of the report's key sectors for Maryland is manufacturing, where the state lost 12,800 jobs last year, or nearly 6 percent of its total.

While the report said little improvement was expected over the next six months, it noted an increase in shipments, new orders, exports and raw material prices. Manufacturers surveyed by the Fed bank also said they expected employment to increase.

"What we have to remember is that a level performance here is good compared to what has happened in the past. To say it's flat is great," Mr. Conte said.

In addition to manufacturing, the survey reported optimism about the next six months in consumer spending, the port of Baltimore, tourism and residential real estate.

In the second quarter of this year, imports shipped through Baltimore increased 3.7 percent over the second quarter of last year to 645,608 short tons, but exports decreased by by 15.6 percent to 652,726 short tons, according to the Maryland Port Administration.

Overall, general cargo traffic in and out of Baltimore was down 7 percent in the second quarter of 1992 compared to the same period of 1991, according to MPA figures.

And only half of the regional hotels and resorts surveyed reported fall bookings ahead of last year. The other half expected about the same level of business.

Respondents from financial institutions said there had been little change, except for refinancing home mortgages to take advantage of lower interest rates.

Cool temperatures were reported to be slightly hampering crop growth in Maryland and West Virginia.

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