Jobs added, markets improve

Strong economy brings benefits to city

January 24, 1999|By Jay Hancock | Jay Hancock,Sun Staff

Positive economic signs are everywhere, from solvent governments to insolvent -- but gainfully employed -- consumers. But for striking evidence that the national prosperity is real, seeping even into bare corners, look at Baltimore and some other older cities.

They're adding substantial numbers of jobs for the first time in nearly a decade.

In November, the most recent month for which data are available, about 419,000 people were working in Baltimore. That's 6,000 more than in November 1997, closing in on almost a full year of substantial job gains for the city.

"Generally speaking, most business people I talk to have done pretty well this year" in Baltimore, said John H. Ott, chairman of the Baltimore Chamber of Commerce and director of the B&O Railroad Museum. "There have been some peaks and valleys, but most people have done pretty well."

At about 1.5 percent, Baltimore's projected job growth for 1998 is slower than that of its outlying counties or of Maryland as a whole.

Several economists believe that Maryland as a whole is adding jobs at better than a 2.5 percent annual rate.

But for the city, 6,000 net new jobs is very good, although how long the growth can continue is debatable.

"The city's doing a lot better this year," said Mark Vitner, an economist who follows Maryland for First Union Corp. in Charlotte, N.C. "There aren't a whole lot of other urban centers that are getting better."

Vitner and other analysts attribute Baltimore's revival, first of all, to a benign national economy.

"I'll give [Federal Reserve Chairman Alan] Greenspan some credit for loosening the bolts," said M. Jay Brodie, head of the Baltimore Development Corp., the city's economic development wing. "The basic economy has continued to be solid for another year, continuing what has been an extraordinary run."

Greenspan lowered short-term rates recently in an effort to ward off Asian economic blight, and Brodie credits the resulting boost in confidence and growing money supply with helping the city.

The ambient flushness has affected Baltimore in particular ways, most notably in its real-estate and tourism sectors.

Thanks to rising prices and falling vacancies in the suburban office market, "the city has become more competitive in terms of rental rates," said Anirban Basu, an economist at Towson University's Regional Economic Studies Institute who has followed Baltimore for years. "Certainly this is reflective of the declining vacancy rates in the city and the fact that there is now a dearth of high-quality office space on the market. The city is now perceived as offering better value for businesses."

With suburban rents now surpassing $20 a square foot, analysts said, downtown Baltimore's parking problems are less of a drawback for prospective tenants.

The city is benefiting from new restaurants downtown and elsewhere and new tourist attractions, including Ravens Stadium, ESPN Zone and Port Discovery, the children's museum.

The facilities first generated construction jobs and now employ people to operate them.

Baltimore is also seeing a revival in home sales.

Through November, 6,147 homes had been bought in the city, according to the Maryland Association of Realtors. That's a 41 percent increase over the same period the previous year, and prices paid for houses are rising, too.

Of course, vast parts of the city are not prospering. The revival is confined mainly to downtown, neighborhoods near the harbor and neighborhoods near the city's Jones Falls Expressway spine. Census experts think Baltimore is still losing population.

"We really need to find ways to get that same culture into other parts of town," said Ott. "Maybe there is going to be a wave of new people." Because of the rising stock market, he said, "there definitely is money to buy property. There really is a lot of house for the buck."

Other big-city cores are showing positive signs, but Baltimore is doing better than nearby rivals Washington and Philadelphia. Philadelphia stopped its downward job slide at about the same time Baltimore did, but its growth this year of 0.7 percent is only about half of Baltimore's.

In Washington, the November job level was about even with the year before, but for most of 1998 the city has shown job losses.

Baltimore shouldn't feel complacent, analysts said. Its manufacturing industry, in particular, remains vulnerable to competition from the South, to overseas producers and to economic torpor.

"The city at long last appears to be partaking in the national recovery," said Basu. But, he cautions, "it's not really clear at all how stable it is. The city is home to a number of industries which have suffered most during previous recessions."

Pub Date: 01/24/99

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