Survey indicates Md. economy is slowing

Maryland Watch

May 16, 1998

A tight labor market is squeezing Maryland's economy, which is showing signs of cooling off, economists say.

The University of Baltimore, in its Maryland Business Climate Survey, looked at how 250 businesses performed in the first quarter.

The survey, which was conducted by the university's Maryland Business Research Partnership, found the percentage of businesses reporting higher sales and more employees dropped substantially for the quarter.

The proportion of firms with increased revenue fell from 66 percent in the fourth quarter of 1997 to 59 percent in the first quarter of 1998.

Economists believe the firms reacted to lower revenue growth by hiring fewer people. Employment increases for the quarter dropped to their lowest level in six quarters, at 32 percent.

Economists speculated that a tight labor market may have slowed the state's economy. The majority of firms view the state's labor market as an obstacle to doing business in the state, the survey found.

"More than half the companies are saying they can't find the staff they need, and that's a significant amount," said Richard Clinch, director of the partnership.

Pub Date: 5/16/98

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