Index indicates 2nd-quarter slide in local economy


The economies of both Baltimore and Washington sagged in the spring of this year, Grant Thornton, a national accounting and management consulting firm, said yesterday. .

Baltimore fared a little better than Washington, however, in terms of retail sales, and its overall economic performance was better than the average of the 24 cities included in the latest quarterly economicsurvey, called the Grant Thornton Index.

The index is based on six economic indicators -- factory hours, non-farm employment, construction permits, retail sales, business starts and business failures -- and the national money supply, commonly called the M2.

Its base measurement of 100 was calculated on those seven statistics as they stood in January 1985, said John Koegel, a Grant Thornton spokesman in New York.

"We sort of set the speedometer back to that month, and since then we've tracked . . . data," Mr. Koegel said.

In the second quarter of this year, Baltimore slipped to 109.5 from 109.6 in the first quarter, and Washington fell to 110.8 from 111.5.

The two dozen cities included in the index fell 0.58 points, to 109.2, during the second quarter.

Construction permits, which dropped 0.85 points in Baltimore, fell 0.47 points in Washington. But the average for all of the cities in the index registered a decline of 1.31.

"What that means is construction is slowing in most of these places. There will be less employment inthe industry in the future, less spending for materials, etc.," Mr. Koegel said.

Retail sales for the quarter declined 0.46 points in Baltimore and 0.80 points in Washington. Sales declined an average of 0.56 points among the 24 cities.

Over the 12 months that ended in June, Baltimore was up 0.29 on the index, Mr. Koegel noted. This compares with an average increase of 1.11 among the cities thatwere studied. "Baltimore has basically held its own over the year," he said.

Almost two-thirds of the employment in Baltimore is in services,

trade and government, and is spread evenly among three areas, each of which has shown improvement in measurements for the last quarter and the past 12 months, Mr. Koegel said.

"One of the strong points the Baltimore economy has going for it is that it's fairly diversified. So a slowdown in one sector can be softened somewhat by another sector," he added.

Copyright © 2020, The Baltimore Sun, a Baltimore Sun Media Group publication | Place an Ad