Solid growth predicted for BWI area in 1994

February 03, 1994|By Consella A. Lee | Consella A. Lee,Sun Staff Writer

An association of employers in the area of Baltimore-Washington International Airport is predicting moderate growth for the region this year, thanks largely to increased passenger traffic and service at BWI, declining commercial real estate vacancy and unemployment rates, and increases in home construction and consumer spending.

"I don't think it's going to be a huge burst," said Neil M. Shpritz, author of the year-end economic report released this week by the BWI Business Partnership, "but I think it's going to be pretty solid."

The BWI Business Partnership, a nonprofit, public-private association of employers in the Greater BWI area, promotes the region's business climate and economic development. The report evaluates the economy of the Baltimore-Washington area.

Mr. Shpritz, an analyst of regional economies for nearly 25 years, said inflation has remained in check and he expects interest rates 12 months from now to be about where they are today.

But Mr. Shpritz conceded that some economists, fearing that the economy is "heating up too fast" and that government spending still needs to reined in, would disagree with his conclusions.

"I am personally confident that interest rates are going to stay low," said Mr. Shpritz, executive director of the BWI Business Partnership, "and that's a very important component in all of this."

While there may be some bumps along the road toward recovery, Mr. Shpritz said, "The worst is over. I don't think the whole process is completely over. But the worst is over."

"We started coming out of this recession in the first quarter of 1993," said Michael A. Conte, director of regional economic studies at the University of Baltimore. "People have referred to this as a jobless recovery, but it has not been a jobless recovery in Maryland."

Prospective employers, made cautious by past false starts in the economy, are likely to proceed slowly with hiring plans, Mr. Shpritz said. But indicators point to job stability.

While the service sector is expected to lead the way, Mr. Shpritz said, he expects hiring prospects in the manufacturing sector also will increase.

Mr. Conte said he expects the state as a whole and the Baltimore-Washington region to perform well during the year.

Low mortgage rates continue to fuel residential construction and lower rental rates should lead to a stabilization in office space rentals, he said.

Although holiday retail sales were not spectacular, he said, they were solid and demonstrated growing consumer confidence in the economy. Mr. Shpritz said he expects January sales may not fare well, because of the recent bad weather.

The airport continues to be "the economic engine of Greater BWI," said Mr. Shpritz, noting that airport traffic for the fourth quarter of 1993 grew by 33 percent compared with the same period in 1992.

The airport served 9.4 million passengers last year, its first net gain since 1989. It expects to serve an additional 1 million passengers this year.

Discount fares, spurred by the fall arrival of Southwest Airlines, have led competitors, most notably Continental and USAir, to increase the number of their departing flights. The prospect of continued increases in service has prompted the state to proceed with a $25 million expansion of Pier C, which would add six gates.

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