Maryland economy posts biggest 12-month gain in five years

The RESI Maryland Leading Index increased 1.1 percent in August and was up 3.2 percent from last August, the largest 12-month gain since March 2000. The index benefited from improvements within the construction, manufacturing, hiring, sales and welfare categories, while an increase in unemployment insurance, higher interest rates and a decline in airport activity weighed negatively.

Total employment

Maryland lost more than 5,000 jobs in August, a decline of 0.2 percent, in its first monthly drop since March. However, annual job growth remains strong as payrolls increased at a 1.9 percent pace equating to just less than 48,000 net new jobs.

Maryland's unemployment rate rose for the second consecutive month to 4.4 percent, the highest since December 2003. However, as has been the case for most of the year, the state's labor force continues to expand in both employed and unemployed categories.

Unemployment insurance data for August stayed consistent with the weak performance within Maryland's job and labor markets. Initial unemployment claims increased by 13.1 percent for the month, but remained 4.2 percent below claim levels from last August. Unemployment benefits performed similarly, gaining 13.1 percent for the month, but declining 7.1 percent over the past year.

Sales tax receipts

Maryland sales tax receipts, a measure of consumption within the state, were mixed for the month. Sales of durable goods, items intended to last three or more years, increased by 3.6 percent, while sales of general merchandise, apparel and furniture (GAF) decreased by 0.2 percent. Over the past year, sales within both categories remain above prior year sales by 8.9 percent and 7.5 percent, respectively.

Airport activity

Airport activity at Baltimore/Washington International Thurgood Marshall Airport was soft in August. Total passenger traffic declined 0.6 percent for the month and was slightly below the number of passengers using BWI last August. Freight shipments also dropped for the month, down 0.7 percent, but remained 6.7 percent above total freight shipments from a year ago.

Home sales

Maryland home sales rebounded in August from July's decline, gaining 4 percent and remained slightly higher from sales recorded last August. Pending sales also rose for the month, increasing 4.3 percent and establishing a new record at 9,584.

Despite the high level of actual and pending home sales, inventories of homes continue their monthly ascent. The number of homes available for sale rose 5.7 percent in August, the seventh consecutive monthly increase, and was 26.3 percent higher than the homes inventory a year ago.

Home price appreciation relaxed in August as the average home sale price dropped 1.9 percent and the median home sale price declined 1 percent. Annual appreciation remains strong, however, as average and median prices grew 18.3 percent and 21.0 percent, respectively.

The number of building permits registered 2,342 in August, the highest level in 20 months and an increase of 45.1 percent from the prior month. Accordingly, permit values increased 34.3 percent for the month.

Automobile sales

Maryland car dealers collectively established new sales records in August. Sales of new cars grew 14.2 percent for the month and 27.3 percent over the past year. Sales of used cars increased 12.5 percent in August and were 19.1 percent better than sales registered 12 months prior.

John Hopkins, an economist with RESI of Towson University, analyzes Maryland's economy every month for The Daily Record.

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