Maryland's Economy Outperforms Expectations

by Anirban Basu 13. April 2012
Anirban Basu
Anirban Basu, Chairman & CEO of Sage Policy Group, Inc.

 

Job creation has picked up in Maryland. After stumbling for much of the previous summer, recent months have been very positive from a job growth perspective.  The working hypothesis is that this represents economic multiplier effects related to base realignment activities at Fort George G. Meade in Anne Arundel County and at Aberdeen Proving Ground in Harford County.

Between February 2011 and February 2012, employment in the Free State increased 1.9 percent or by 47,000 jobs according to establishment survey data provided by the Bureau of Labor Statistics.  That ranks the state seventh in the nation with respect to year-over-year percentage job growth, a significant improvement from a particular period last year when Maryland ranked dead last (May 2010 v. May 2011).  Leading growth sectors include construction (+5.0%), education and health services (+4.2%), professional and business services (+3.1%) and leisure and hospitality (+2.9%).  Base realignment has helped to support job growth in a number of key business segments, including professional services and construction.

State-by-State Job Growth

Maryland's January 2012 unemployment rate represented the lowest rate in three years.  The state's jobless rate dropped to 6.5 percent in January, almost 2 full percentage points below the national average of 8.3 percent for that month (now 8.2 percent; March 2012).

Other sources of information are similarly sanguine.  A recent Maryland Survey of Business Activity conducted by the Federal Reserve Bank of Richmond indicates that business activity increased at a solid pace in March with the general business activity index jumping to 26 from 8 – the highest reading since April 2011.  Roughly 50 percent of respondents in the March survey expect business conditions and sales revenue to improve over the next six months.

Despite the emergence of optimism, headwinds remain.  As of this writing, U.S. equity markets are in retreat and long-term interest rates are falling, an indication of ongoing concern regarding the economic outlook.  The consensus forecast is for roughly 2 percent growth in America in 2012, with the implication being that the economic recovery remains fragile.

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.

 



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