Whether the country will suffer a recession this year is an open question. (I still say no. Others - notably New York University economist Nouriel Roubini - disagree.)
But the answer regarding Maryland is beyond dispute. Fortified by continued defense spending, health care growth and - yes - construction, this state will increase output and avoid a slump even if the nation doesn't.
It probably won't be a boom year. The housing slowdown will see to that. But Maryland should expect continued moderate employment growth, decent credit availability and acquisitive consumers.
There were few signs of downshift at the end of 2006. With year-over-year growth of about 1.3 percent, Maryland's job market was outpacing those of Pennsylvania and West Virginia and keeping up with those of Virginia, Delaware and the nation.
The star industry: health care, a Maryland specialty, which accounted for 8,000 new jobs last year. That represented a quarter of the state's total employment growth, and medicine's proportional contribution to metro Baltimore's job growth is even more impressive.
Three things are propelling the medical surge, and none will go away soon.
As the population ages, demand rises for services at Johns Hopkins Hospital and the other sophisticated institutions. Maryland's biotechnology industry, supercharged by the nearby National Institutes of Health, is coming into its own. And Washington continues to pump money into research on anthrax defenses and other counter-bioterrorism, which also hits Maryland's health care sweet spot.
Probably no other sector will grow as fast as health care, but continued deficit spending by Washington will keep a floor under defense and other federal contracting, government employment, manufacturing and finance.
With the absorption of Mercantile Bancshares by PNC Financial, Baltimore's financial employment will again come under pressure.
But the loss will be nowhere close to what happened in the 1990s, with the disappearance of Alex. Brown, MNC Financial and USF&G.; Financial employment in the state has grown every year since 1995, and the ambitions of up-and-comers such as Stifel Nicolaus and Signal Hill Capital may help it grow again in 2007.
Or maybe not. Finance, of course, includes mortgage banking. No sector bears bigger risk of a downturn this year than housing, and when housing totters, mortgage banking collapses. Maryland's new requirement that loan originators be state-licensed increases the potential for finance-sector job loss.
The macroeconomic risk from a housing "correction," of course, goes far beyond the loan and title companies and real estate agents. Black & Decker and Home Depot, which make money by building and outfitting new homes, are suffering from the housing slowdown. The biggest danger is a jump in mortgage defaults that leads to a banking balance-sheet scare and a credit drought for all businesses, as in the early 1990s.
A severe housing downturn is the No. 1 fear of economists who place high odds on a national recession this year. As evidence, they point to big declines in building permits, mortgage applications and homebuilder stocks and increases in foreclosures and delinquencies. The most poisonous factor in a potential housing disaster are the billions in low-quality mortgages that will go bust if the economy substantially slows - and then drag the economy even lower.
But the national housing indicators are not unequivocal. New home prices rose in November along with new home sales, according to the government.
And the Maryland housing indicators aren't even that gloomy. In November, Maryland ranked 39th among states for high rates of foreclosures, according to RealtyTrac. (Sun Belt and Rust Belt states such as California, Georgia, Michigan and Ohio ranked much higher.)
At the end of September, the most recent period for which data are available from the Mortgage Bankers Association, fewer than 4 percent of Maryland mortgage payments were past due. That was below the national average and far below results for Texas (7 percent) and West Virginia (6.4 percent.)
There is no doubt that Maryland housing is slowing. The days of double-digit percentage price increases are over. Inventories of unsold homes are up.
But the military base realignment process will bring tens of thousands of jobs and people to Maryland in the next five years. Interest rates are still low by historical standards. Inflation (except for electric and other energy costs) is under control. That's a decent recipe for the nation and an even better one for the state.
jay.hancock@baltsun.com