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Mark Vitner
(704) 383-5635
Media Contact:
Elizabeth Hodges
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December 31, 1999
High Tech & Professional Services Continue To Fuel Maryland's Economy
Maryland's economy is entering the New Year with solid momentum. First Union's measure of the Maryland's Gross State Product grew 3.9% in 1999 and is expected increase 3.6% in the coming year.
Conditions continue to improve across most industries. The strongest growth continues to come from business and professional services, which includes the bustling high tech sector. Transportation and distribution are also growing more rapidly and even the state's manufacturing sector is showing signs of strengthening.
One notable exception is agriculture, which was hampered by drought and low prices throughout 1999. Farm income dropped an estimated 22% during the year. The coming year should be better. Although still depressed, farm prices have rebounded recently, which, assuming the weather cooperates, should boost incomes in 2000.
Maryland's high tech sector continues to post strong gains. Hiring rose 3.6% last year and output increased 5.7%. The strongest gains continue to be in computer programing and data processing. Engineering and research are also growing rapidly. The biggest turnaround, however, has been in the defense sector, which had been lanquishing. Defense-realted output rose 5.5% last year and even stronger gains are expected in 2000.
The improvement in the defense sector has also helped boost manufacturing. Maryland's factory sector saw output climb 4.3% last year and output in the durable goods sector rose 7.6%. Notable developments in the factory sector include the $600 million renovation and modernization project at Bethlehem Steel's plant at Sparrows Point. Litton industries also announced that they were consolidating some manufacturing and engineering functions in College Park. Several smaller manufacturers also announced expansions this past year.
On the down side, the state textile and apparel industry continued to lose jobs. Paper and packaging companies also downsized in 1999.
Maryland's factory sector should post modest gains again in 2000. Output is expected to climb 4.0%, with the strongest gains once again coming from the high tech sector. Employment should increase 2.0%.
The improvement in the factory output is also driving growth in Maryland's wholesale trade and distribution sector. Output in the warehousing and trucking industries jumped 10.6% over the past year. Several firms, including DAP, Restoration Hardware and Sweetheart announced plans for new or expanded facilities.
Business at Baltimore/Washington International Airport is also booming. Through November, passenger traffic is running 16.5% ahead of its year ago pace, making BWI the second fastest growing airport in the country.
Retailing is another area that should contribute more in the coming year. Home Depot and Lowes have moved quickly to fill the void that opened when Hechinger closed its doors. In addition, Kohl's, Target and Value City are taking over some of the former Caldor sites around the state. We expect retailers to add 7,500 jobs in 2000.
Higher mortgage rates should slow homebuilding, but Commercial construction should increase. Retail and office projects should lead the way. Total construction spending rose 5.5% in 1999 and is expected to rise 5.0% in 2000.
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