Commentary: Md. economy grows by 2 percent

The RESI Maryland Leading Index - a measurement of the state's economy taken on behalf of The Daily Record - increased 0.5 percent in May and was up 2 percent during the last 12 months.

Index components posting growth include manufacturing, welfare, help wanted ads, construction and air traffic. Negative components of the index were sales and unemployment claims.

Total employment

Job growth was slow for the month, but remains well improved compared to last May. More than 56,000 jobs were created during the last year, a 12-month growth rate of 2.2 percent. Job growth was 0.1 percent for the month.

Unemployment rate

The state's labor force has expanded, due to both increases among the employed and unemployed; however the unemployment rate remains unchanged at 4.3 percent in May as well as over the past 12 months. Maryland continues to outperform the nation with a corresponding unemployment rate of 5.1 percent in May.

Claims and benefits

Initial unemployment claims rose by 3.4 percent in May and were up 5.8 percent from last May, representing the first time in nearly two years that initial claims have increased over the past 12 months. Accordingly, payments of unemployment benefits rose 16.7 percent for the month and were up 8.7 percent from last May.

Sales tax receipts

Consumer spending was down for the month. Sales tax receipts of durable goods, items intended to last three years or longer, decreased by 1.3 percent in May, but remained 7.1 percent above receipts over the past 12 months.

Tax receipts from the sale of general merchandise, apparel and furniture declined 1.1 percent for the month. Moreover, general merchandise, apparel and furniture receipts were down 2.5 percent from last May, the biggest drop since February 2003.

BWI activity

Activity at BWI airport was mixed in May. Passenger traffic increased by 2.1 percent for the month, but was down 6.7 percent last May. Freight shipments through BWI decreased 1.3 percent in May, yet increased 2 percent over the past 12 months.

Home sales

More than 8,200 Maryland homes were sold in May, representing a 1.7 percent increase and the strongest number of sales recorded since November of last year.

Over the past year, home sales have increased by 9.3 percent. The number of homes pending sale increased as well, gaining 0.6 percent for the month and 5.9 percent for the year.

Home inventories

The active inventory of homes available for sale rose by 10 percent in May to 15,700, the highest level the state has recorded in three years. Inventories are also up 14 percent for the year, the highest 12-month gain since March 1997.

Home prices

The state recorded an average home sales price of $332,811 in May, 0.8 percent above the average posted in April and 18.7 percent higher than the average price recorded last May. The median home sales price slipped by 1.1 percent for the month to $263,510, yet exceeded last year's median price by 22.6.

Building permits

Building permits rebounded in May from April's slide. The number of residential building permits increased 0.9 percent for the month, and was up 25 percent from last May. The total value of residential building permits grew 6.1 percent in May, to over $412 million, a record high.

Automobile sales

Cars sales were mixed in May. New car sales in Maryland dropped 2.3 percent, the second consecutive monthly decline, and were 0.9 percent below sales from 12 months prior. However, sales of used cars increased by 1.2 percent for the month and 9.8 percent from last May.

John Hopkins, the associate director of applied economics and human services at RESI Research & Consulting, analyzes Maryland's economy every month for The Daily Record. The opinions expressed are his own. He can be reached at 410-704-6342.

Copyright 2005 Dolan Media Newswires
Provided by ProQuest Information and Learning Company. All rights Reserved.