BRAC helps keep Harford economy afloat, economist says

BRAC may be one bright light in a bleak economy with almost no job growth, but its effects have yet to be fully felt, economist Anirban Basu told a group at a Chesapeake Science & Security Corridor conference last week in Edgewood.

Basu, chairman of the Baltimore-based Sage Policy Group, was the keynote speaker at the Sept. 28 day-long conference called "Beyond BRAC: Shining the Light on Innovation & Opportunity in the CSSC Region."

He painted a grim picture of the national and state economies, which he said were steadily recovering from the 2009 recession until recent months.

Most significantly, the nation generated no new jobs in August, and has lost about 6.9 million jobs since December 2007, he said. He estimated, in an optimistic scenario, that it would take until 2017 to return to the job levels of 2007.

"It makes the jobs being added for base realignment that much more important," Basu said, adding Maryland only created 3,600 jobs between August 2010 and August 2011, making up just 0.1 percent of job totals.

The state is ranked 15th in the country for job gains, while states like North Dakota and Oklahoma are in the top 10.

"We were supposed to be an outperformer," he said about his projections for the state. "Why is the American job machine so broken?...A lost decade of job growth, that's what we're talking about."

BRAC job growth in and around Aberdeen Proving Ground may have contributed to cushioning Harford from some unemployment. Basu said, however, that neighboring Cecil County has the worst unemployment in the Baltimore region and should be most interested in job creation.

"BRAC has been critical, but not yet highly visible in the employment data, for whatever reason," Basu said.

In information-related fields, Harford is projected to see a 22 percent rise in job growth between 2000 and 2015, versus zero percent for Cecil County and 1 percent for Baltimore County, he said.

BRAC seems to have also cushioned the blow for Harford's housing market, despite the extremely weak market that persists everywhere.

Of the people relocating for C4ISR (Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance) jobs to date, 60 percent have moved to Harford, more than Basu's 2007 prediction of 46.5 percent. He had also predicted up to 25 percent of new arrivals would move to Baltimore County.

Basu thought his prediction could still come true, however, as the years go on, which would mean Harford's BRAC arrivals could decline.

"We are not at 'steady state' yet. A lot of the people coming here still have ties to New Jersey," he said. "I think one of the reasons most people moved to Harford County than we predicted is there's actually more housing available to purchase, from the vantage point of 2007."

Basu saw no signs of economic recovery in the housing market and, as a result, very low numbers of housing starts.

"My guess is, you would have hardly any, of course, without base realignment," he said.

Other signs of economic growth remained weak in Maryland, Basu said. The state predicts a budget shortfall of 10 percent in 2012.

"Government is not positioned to be an economic driver in 2012," he said, adding he thinks there is a "very high" chance of another recession.

"Major sectors of the private sector are really not participating in the recovery," he explained.

Consumer spending is the economy's main salvation right now, he said, as wholesale and luxury shopping outlets are doing very well and chain-store sales are up.

"The consumer is still spending, and that's what keeps this economy out of recession," he said. "The economy has hit a soft patch…Much will depend upon consumer spending this month and beyond."

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