Business climate study finds state is 'picking up' Maryland's strengths called likely to help it weather next downturn


October 08, 1998|By Shanon D. Murray | Shanon D. Murray,SUN STAFF

Maryland has finally shaken off the lingering effects of the 1991 recession, and as the national economy faces another possible downturn, the state may manage to avoid being hurt, according to a report released yesterday.

The "business climate" survey, conducted by the University of Baltimore's Maryland Business Research Partnership, ranks Maryland with every other state and the District of Columbia in 145 economic development indicators such as expanding businesses, real estate costs and telecommunications networks.

The study says Maryland appears to be emerging from its recent period of slow growth. Even a recession may not have an extreme impact on the state, said Richard P. Clinch, director of the partnership, a coalition of major Maryland businesses that paid for the study.

"Maryland is picking up just as the nation hits a cyclical peak," he said, adding that while the nation was enjoying a robust economy, the state wasn't.

Also, Maryland's strengths, such as a strong transportation system and an educated and productive work force, are staples that may not change despite a national economic downturn.

Yet, Maryland does have significant weaknesses, such as real estate and labor costs, and a tax burden that exceeds those of competing states.

Michael Funk, a research economist with the Regional Economic Studies Institute at Towson University, said he agrees that Maryland has a bright outlook, but he does not think the state could withstand another recession.

"A lot of what's happening here in Maryland is tied to national activities," Funk said.

12th in new businesses

"The state's expansion isn't just consumer-based expansion. Its growth is part of national trends, but should those trends take a turn for the worse, then Maryland will also," he said.

The "Benchmarking Maryland's Business Climate" report, a 37-page study with 77 pages of appendixes, is a compilation of figures, rankings and percentages, such as:

* Maryland ranked 26th nationally in employment growth between 1996 and 1997, 12th in the number of new businesses started and 27th in the number of new corporate facilities last year -- all of which are key indicators of more growth, the report said.

* The state ranks 43rd in total crime, 45th in average annual pay and 38th in new business job growth -- factors that could stymie Maryland's growth.

A ranking of 1 would be the highest among the states, a ranking of 51 the lowest.

The report is a "pretty fair representation," said Dyan Brasington, president of the High Technology Council of Maryland, a Rockville trade group, who attended the conference.

"It's better to look at where we're going rather than where we've been," she said.

"It's tremendously important we keep our eyes on our status, and not out of a mindless sense to be competitive," said Champe C. McCulloch, president of the Maryland Chamber of Commerce.

"It's important to be at the top of the pack so our citizens can have a better quality of life," he said. "That's what economic development is about."

The study was sponsored by 18 local companies, which each contributed up to $10,000 to fund the study, Clinch said.

"The state doesn't collect this kind of information. Counties don't collect this type of data," Clinch said. "If the private sector didn't do it, we wouldn't have this information."

Pub Date: 10/08/98

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