County's economy is robust but lags behind nation's growth

January 05, 1995|By Howard Libit | Howard Libit,Sun Staff Writer

Howard County's economy is getting stronger -- particularly in the area of commercial office rental -- but still lags behind the national recovery, according to the county's most recent local economic report.

"While the national economy may be growing, and in fact overheating in some regions, economic growth in Howard County and Maryland does not appear to be following this path," said the quarterly report issued jointly by the county government and the Howard County Economic Forum.

"Some segments are moving forward more quickly than others, and some remain static.

"Confidence in the economy is still lagging. Changes in the national political climate may contribute to this lack of confidence as consumers take a 'wait and see' attitude to determine the impact of political decisions, i.e. taxes, reduced government," according to the report, which was released late last month.

The report, based mainly on statistics compiled through September 1994, was prepared by a committee of county officials and representatives of the Economic Forum, a business group.

The report found that rising interest rates slowed the local economic recovery in the first three quarters, particularly the residential housing market, because buyers and builders were less able to afford loans.

But a significant sign of new commercial growth was the decline in the office vacancy rate, which has fallen from 15 percent in 1992 to under 10 percent in the first nine months of 1994.

"That is a significant decrease, because what it suggests to us is that the low vacancy rate will create a need to construct more build-to-suit office space in the upcoming months or year," said Richard Story, director of the Howard County Economic Development Authority, a quasi-governmental agency.

The increased demand for office space was noted last month in the sales of two major commercial properties. Kollman Properties Corp. purchased the 107,000-square foot Clark Building in Columbia's Town Center Dec. 19 for $6.5 million. And the nine-building, 157,725-square-foot Columbia Business Center in Columbia's Owen Brown village was sold Dec. 30 to a partnership of the Manekin Corp. and members of the Paterakis family of H&S Bakery Inc.

New residential construction has remained fairly constant over the past three years since the county passed measures to stabilize development of new subdivisions, the report said.

But there has been a recent surge in building permits issued for new single family homes.

Among the other notable statistics in the report:

* Employment of county residents rose 1.3 percent from August 1993 to August 1994 to 110,910, and the unemployment rate declined from 4.7 percent to 4.3 percent.

* Sales tax revenues rose 35 percent from apparel and 11 percent from general merchandise from September 1993 to September 1994, but sales tax revenues from furniture and appliances declined 2.5 percent.

* The local agricultural industry continues to suffer. "Countywide farm income is depressed and cash flows are stressed as a result of the combination of high crop yields and low market prices," the report said.

* The average sale price of a single family home sold in August 1994 was $196,563, up 1 percent from August 1993. And 369 fewer homes were sold. The average price of a condominium unit sold during that period jumped 10.7 percent to $113,788, but the number of units sold decreased by 64.

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