Economic data show steady growth likely for BWI area for rest of year

August 19, 1993|By Consella A. Lee | Consella A. Lee,Staff Writer

A new airline is scheduled to begin service to Baltimore Washington International Airport next month, local businesses are predicting they will be hiring, consumer purchases of automobiles have increased and the commercial real estate market is stabilizing.

It all points to recovery and growth, according to a midyear economic report from the BWI Business Partnership. Not booming growth, but slow, steady growth through the year's end.

"There's been slow growth, but there's been growth," said Neil M. Shpritz, who put the report together. He has been analyzing regional economies for nearly 25 years.

The report looked at how the local economy performed in the first six months of the year to make its predictions for the rest of the year.

"There's clearly been no return to a recession," said Mr. Shpritz, executive director of the partnership, a nonprofit, public-private association composed of employers in the area around the airport. "But on the other hand, we are not jumping up and down screaming great prosperity is coming."

His prediction of a gradual economic recovery for the area parallels forecasts from Maryland's secretary of economic development for the state as a whole.

The midyear report pointed to improved hiring prospects among area businesses, increased consumer purchases of cars and a strong bulk distribution industry among the signals that the regional economic picture is gradually improving.

A survey of area businesses the partnership conducted last spring showed that 23 percent expected to increase employment levels, while less than 9 percent anticipated decreases over the next six months.

Mr. Shpritz cautioned that that doesn't suggest a crescendo of hiring is about to occur, but it does mean that the Baltimore-Washington region will resume a growth rate that historically has been faster than the nation's as a whole.

The report singles out the opening of Southwest Airlines' first East Coast hub at BWI airport as evidence of the growth potential.

"They don't just steal market shares from other airlines," said Mr. Shpritz. "They actually build a market size."

When Southwest, known for driving airfares down along its market routes, rolled its first Boeing 737 into Cleveland's airport two years ago, airline traffic there was stagnant. Now, an additional 1 million passengers a year use the airport.

Mr. Shpritz predicted the company will do the same for BWI, which needs a boost over its competitors: Dulles International and National airports outside of Washington.

The prospect of a new, international terminal at BWI, particularly as foreign trade and investment opportunities play a larger role in where companies locate, should bode well for the area, too, Mr. Shpritz said.

The report indicated commercial and industrial real estate markets are showing signs of stabilizing, with warehousing and distribution sites showing particular strength. But the residential real estate market has not followed suit, despite the availability of the lowest home mortgage rates in about 25 years.

The average interest rate on conventional 30-year loans last week was 7.12 percent plus almost 2 points, according to HSH Associates of Butler, N.J., which tracks mortgage rates.

"Home interest rates are fundamentally as low as they can get," said Mr. Shpritz, but "people are still afraid for their jobs."

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.