Anirban Basu Chairman & CEO of Sage Policy Group, Inc
Maryland Gained Momentum Late Last Year
For much of last year, Maryland’s economic performance was among the worst in the nation. For instance, year-over-year job growth in the state was in negative territory or close to zero for most of the summer. But like the balance of the nation, economic performance began to materially improve toward the tail end of the year. For the 12 months ending in November 2011, employment in the Free State expanded 0.7 percent (+18,300 jobs), ranking the state 33rd along this dimension. That may not sound like anything to crow about, but just a few months prior, Maryland ranked dead last. Maryland’s subpar performance mid-year appears to have been closely linked to the nation’s debt ceiling debacle and the impact of that episode on federal agency spending, including upon procurement.
Exhibit 1. State-by-state Job Growth, 12-month Percent Change, November 2011
Through it all, Maryland has managed to sustain one of the nation’s lowest unemployment rates. Statewide unemployment declined to 6.9 percent in November, the lowest level since June 2011. That is the 15th lowest unemployment rate in the country.
Other data is also largely encouraging. The most recent Maryland Survey of Business Activity conducted by the Federal Reserve Bank of Richmond indicates that business activity in Maryland increased moderately in December. The general business activity index registered a reading of 7, a meaningful increase from -3 the previous month and the first positive reading since September. The expectations index, which declined 9 points to 22, indicated that while broadly positive expectations of general business conditions six months from now have moderated slightly, survey respondents continue to predict economic growth in the near term.
All of this is consistent with the notion that some of the factors that restrained growth in 2011, including federal government gridlock, sagging home prices and issues emerging from Europe, are likely to continue to shape economic performance during the first half of 2012. However, despite these and other headwinds, the state’s economy is anticipated to continue to grind ahead for now.
Anirban Basu is Chairman & CEO of Sage Policy Group, Inc., an economic and policy consulting firm in Baltimore, Maryland. Mr. Basu is one of the Mid-Atlantic region’s most recognizable economists, in part because of his consulting work on behalf of numerous clients, including prominent developers, bankers, brokerage houses, energy suppliers and law firms. On behalf of government agencies and non-profit organizations, Mr. Basu has written several high-profile economic development strategies, including co-authoring Baltimore City’s economic growth strategy. His opinions do not necessarily reflect the opinions and beliefs of 1st Mariner Bank.