Maryland S Economy

In what could be a sign that Maryland's economy may be weakening, the number of business failures rose in the first quarter of the year, the Dun & Bradstreet Corp. has reported.Although local business people and bankruptcy lawyers disputed the analysis, the Wilton, Conn.-based research company said the number of business failures has been rising steadily in Maryland since 1993.And in the first three months of 1995, the number of businesses that declared bankruptcy, closed or caused losses for creditors reached 385, 19 percent more than in the same period a year ago."

To build on our existing economic strengths and usher in a new era of prosperity, Maryland must strengthen our already impressive roster of enterprises devoted to medical innovation. Medical research drives much of Maryland's economy, and the state can produce new jobs through efforts to upgrade its education system, seek federal help in focusing more state resources on innovation, and head to Washington to make the case for medical innovation. A new report from research firm Battelle and the Council for American Medical Innovation (CAMI)

Hundreds of export doors will eventually open for some of the fastest-growing parts of Maryland's economy with the sweeping accord under the General Agreement on Tariffs and Trade.No one is willing to risk concrete estimates of what the state stands to gain, not until the fine print of the trade accord is read. Nonetheless, virtually everyone agrees that the state has a big stake in both the generalities and the details of the GATT negotiations."Maryland has always ranked in the lower half of the states in the value of its exports, but in the past few years its exports have grown by more than 50 percent, to about $5 billion a year," said James L. Hughes, director of the World Trade Center Institute in Baltimore.

Former Gov. Robert L. Ehrlich Jr. gave a speech Tuesday decrying the ways he thinks the state government makes Maryland bad for business. Counterintuitive though it may seem, this might not be a sign that the Republican is gearing up to run for his old job. It's the nature of his criticism that gives me pause. I have generally been skeptical about whether Mr. Ehrlich would seek a rematch against Gov. Martin O'Malley, on the grounds that Mr. Ehrlich would not get in a race he wasn't pretty sure he could win. But polling has consistently shown Mr. O'Malley with a lead of 6 or more percentage points, no matter what was going on in the national political climate.

In Chinese, the word "crisis" includes the characters for "danger" and "opportunity," and Marylanders can look forward to a bit of both during the mild economic crisis the state is enduring, a report on Maryland's economy indicates.That assessment came from J. Randall Evans, secretary of economic and employment development, who presented his third annual report on the Maryland economy yesterday, after a year in which most agreed the state and the nation had entered their first recession since 1982.

In the midst of the worst slowdown this country has seen in years, Maryland's economy is faring better than the nation as a whole. Statewide unemployment registered 5.3 percent in November compared with 5.8 percent nationwide. Retail sales rose 4.8 percent last year against a national increase of 3.7 percent. Even in construction, where Maryland's fortunes have declined markedly, the state is ahead of the national average.Yet even in Maryland, the situation is hardly glowing. Virtually every locality is attempting to cope with lower tax receipts; many are facing deficits and possible layoffs.

The ongoing economic slowdown in Maryland should be mild and brief compared with the 1982 recession, according to a panel of regional forecasters.Maryland's economy "will begin its upturn during the summer," said Robert N. Schoeplein, research director for the Maryland Department of Economic and Employment Development."

Maryland's secretary of economic development said yesterday that the state's economy would stage a gradual recovery this year, after a recession that, he said, laid bare the defects in a state economy that relies too heavily on industries such as construction and defense contracting."

Be poised for the recovery, we are told; so you sit waiting, watching, as if it will appear high in the sky, landing gears out, like the space shuttle gliding over a desert runaway. And while you're waiting, you catch a glimpse of a festive presidential inaugural on the television and notice that your governor is talking again about risk-taking, like the old days, and you look up to the sky anticipating that landing. And then you hear snippets of news from the infant year and you wonder if this bird called Recovery is ever coming down.

ANNAPOLIS -- Maryland's economy is still suffering acutely from severe losses in construction, defense spending and manufacturing, but area business executives say that the long-awaited recovery is finally clearly in sight.In a gloomy assessment of Maryland's economy, Mark Wasserman, secretary of the state's Department of Economic and Employment Development, told legislators yesterday that he had come with "a somber message.""A state that had been considered to be relatively recession-proof now looks in some respects is as if we had ripped a scar off the face of the economy and revealed the weaknesses underneath," he said.

The worst might be over for Maryland's economy, but don't expect business as usual for a long time. That's the picture that emerges from interviews with executives and analysts with broad regional views. "There's a lot of sadness out there," says Fred Glose, chairman of Maryland Chemical Co., which distributes to a variety of industries from its warehouse in Baltimore's Fairfield section. "The money flow is the main stumbling block for our potential customers. People perhaps can't borrow money for whatever they want to do."

The prospects for Maryland's economy this year can be boiled down to a single word - uncertainty. Most experts agree that the economy has emerged from recession and doesn't appear headed for a "double-dip," or sharp downturn. Indeed, they say, the year should be marked by modest growth. But unlike the late 1990s, when the biggest challenge for economists was predicting the speed at which the economy would grow, this year is riddled with wild cards that could stall the recovery and undo progress that has already been made: Most economists believe that war with Iraq is likely, and they worry about its duration.

The nation's wobbly economy is showing signs of strength as the halfway point in the year approaches, but it will not mirror the late 1990s, which cruised at breakneck speed with a soaring stock market and jobs for everyone. While many economists agree that the country has emerged from recession, they expect slow growth for many more months. And they warn that those who are anticipating a quick return to the euphoric era of the last decade will be sorely disappointed. "You can kiss that era goodbye.

Maryland's economy will get worse, but the state will still fare better than the rest of the nation and will be "well-situated for the future," the secretary of the state's Department of Business and Economic Development, David S. Iannucci, told a group Howard County business leaders. At the Howard County Chamber of Commerce luncheon last week, Iannucci said the state's economy is doing well despite a national economic decline since the terrorist attacks. Maryland has suffered, with its tourism industry taking a particularly hard hit, but the state is recovering, Iannucci said.

Maryland's economy grew at a 2.2 percent annual clip during the second quarter, a marked slowdown from the sizzling 6.6 percent first-quarter pace but still better than the national average of 1.8 percent, First Union Corp. economist Mark Vitner said yesterday. Maryland is "basically in the right industries, has the right mix" of businesses, said Vitner, who covers Maryland for First Union. "We don't have all the schools -- especially in the high-tech arena, like MIT or CalTech, though we do have Johns Hopkins, which is on the cutting-edge in the biotech arena.

Don't expect the Maryland economy to provide a stock market-type roller-coaster ride.While the Dow Jones industrial average soars and plunges by hundreds of points, the state's economy continues its steady -- though flattening -- climb.With a solid second quarter behind it, the Maryland economy will cool for the rest of the year but not suffer a severe downturn from foreign currency crises in Asia and Russia, economists said."I think we'll probably end up slowing down a little bit just like the national economy," said Patrick Bradley, senior vice president of Mercantile-Safe Deposit & Trust Co."

Decidedly UpbeatMy recent testimony before the House Economic Matters Committee was mischaracterized as presenting "a gloomy assessment of Maryland's economy." Lest there be any doubt, I am decidedly upbeat about our medium and long-term prospects.My current position carries with it a responsibility to present informed, objective assessments of the state economy from time to time. The initial thrust of my presentation was to explain why it has been that Maryland has suffered the effects of the recent recession more severely than much of the rest of the nation.

To the thousands of Marylanders still out of work more than two years after the national recession officially ended, recovery is proving almost as excruciating as recession.Even as the state begins to turn around, virtually every week brings a new round of layoffs and fresh proof that employment, business activity and tax collections are turning upward later and more gradually in Maryland than in most of America.But to one small and coldly objective band of professionals, Maryland's economy, warts and all, doesn't look all that ugly.

A column by Michael Olesker in Tuesday's editions of The Sun said that a study by the Regional Economic Studies Institute in Towson found that Maryland's economy was the fifth most prosperous in the country. In fact, the May 1997 study said that Maryland had the fifth highest per capita income in the country.Pub Date: 2/05/98

The new year of 1998 finds us blessed. The state of the state is good. The state of the state is very good. We are enjoying the best economy in more than a decade. Our citizens enjoy enhanced security and feel a renewed sense of optimism.Thank you, Mr. President, Mr. Speaker and each member of this General Assembly for your hard work. Thank you also for your dedication to the citizens of Maryland.You can be rightfully proud of your efforts, and our efforts together, over the past three years.