Recovery for Maryland?

May 21, 1994

Ever so slowly, Maryland is emerging from the recession of 1990-1993. Though this state still trails most of the rest of the country in springing back, there are positive signs that steady, modest growth lies ahead for the Free State's economy.

Sales tax receipts, despite the clobbering retailers took during the winter ice storms, are running just ahead of predictions. April showed solid gains. Income tax growth is rising at a 5.8 percent rate, which will also meet estimates. The best news comes from the automobile titling tax, up 20 percent from a year ago.

Car sales have been one of the big strengths of this recent economic surge, though there is now concern higher interest rates may stem that advance. Another big-ticket item, home sales, has perked up, too; Realtors have their fingers crossed that rising mortgage rates won't stifle sales.

In fact, many people have their fingers crossed these days. The uneven pace of this recovery and some nagging structural problems in Maryland's economy have meant a slower-than-expected bounce-back. Will the gains of March and April persist this month and next?

The recession lasted longer in Maryland than in much of the country. The depth of the downturn was worse, too: Our job losses were three times greater than the national average. This state is disproportionately dependent on defense spending. Another factor was the state's heavy reliance on construction jobs in the 1980s. When the recession hit, this region was left with empty office buildings. Construction employment plunged; it is now one-third smaller than in 1989.

Also harming the state was the downsizing of Fortune 500 companies, permanently eliminating entire departments and management levels. Bank consolidations have hurt, too; job losses at Maryland National Bank and the Bank of Baltimore continue. No wonder the recovery is so slow.

But finally we are beginning to share in the good news. The growth in payroll employment has cheered state officials. The pace picked up through the wintertime, most notably in white-collar, professional and technical jobs. Maryland's gains in these categories were 30 percent faster than the nation as a whole. Other decided pluses come from a dramatic drop in bankruptcy filings, a strong surge in help-wanted ads and an upward tick in manufacturing pay and hours.

Maryland's economy isn't exactly booming. The state is still trying to adjust to an era of slow growth. Yet most signs are pointing in the right direction. It may not resemble the go-go '80s, but the mid-1990s could be a time of steady economic advances for the Free State.

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