County retail spending increased in the spring while home sales fell

July 12, 1995|By Mark Guidera | Mark Guidera,Sun Staff Writer

Spending on clothes, furniture, and home appliances was hot in Howard County this spring, but the county's housing market got the cold shoulder, a report released yesterday says.

"The local economy appears headed in two directions," says a quarterly report on the county's economy compiled by the Howard County Economic Indicators Committee, a group of local business and government leaders.

"The retail market is strong and showing signs of growing stronger, while real estate and residential housing markets appear to remain weak."

The committee, which issues quarterly reports on the county's economy, tracks agriculture and retail activity, buying and construction activity in residential and commercial real estate and trends in employment, banking and service industries. The June report says there were two notable bright spots in Howard's economy: employment and retail sales.

The county continued to enjoy one of the lowest unemployment rates in the Baltimore-Washington area. Unemployment was 3.1 percent in March, down slightly from 3.5 percent last March, the committee found.

Also, the average weekly wage for workers employed in the county rose to $570 in September 1994, up $23 or about 8 percent from the same month in 1993, the report states.

The committee also found robust consumer spending at county stores, which in turn fueled state tax revenues.

State taxes collected from Howard sales of general merchandise, such as housewares, were 43 percent higher in March than those collected in the same month last year.

Meanwhile, state tax revenues from sales of apparel in the county were up 15 percent and taxes from sales of furniture and appliances were up 34 percent in March, compared with March 1994.

Strong retail sales were driven in part by the growth of "category killer" stores, such as BJ's Wholesale Club, in the county, the report says.

But, while retailers' cash registers were humming, real estate offices struggled between December and February, the report found.

"Activity in the real estate market overall is down from last year and prices are still moving downward in general," the report states.

Hard hit areas of the county's real estate market were condominiums and homes priced above $275,000. Potential buyers, the report concludes, went "bottom fishing . . . presenting low offers and walking away from negotiations when sellers make counter offers."

The report says a high inventory of homes on the market drove prices down. Other highlights:

* Residential construction was down in March -- with the number of building permits issued off 15 percent from the same month last year.

* In the professional service sector, which includes the accounting, legal and medical fields, business owners "lack the confidence to enter into long-term agreements whether they be leases and business loans."

* The local banking industry experienced record earnings during the past several months. The growth is expected to continue through the year.

* In Howard's agriculture industry, spring planting wasn't delayed by the lack of rain and cool weather, but farmers were hit with higher seed and fertilizer prices -- up an average of 20 percent over last spring. That could drive up the market price of corn and soybeans, but local fruits, vegetables and nursery stock shouldn't be affected.

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