WASHINGTON – A new Commerce Department report ranked Maryland among the 10 states with the slowest annual growth in economic output from 1992 to 1998.
The report, released Tuesday, said Maryland’s gross state product grew at an average annual rate of 2.9 percent over the six years, 1 percent below the national average. It said the gross state product “is often considered the state counterpart of the nation’s GDP (gross domestic product).”
The national recession, agricultural slowdowns and declines in manufacturing were cited as factors that may have contributed to Maryland’s sluggish economic output during the years in question.
But state business and economic officials said they were not overly concerned with the report.
Pradeep Ganguly, an economist with the state’s Department of Business and Economic Development, said the gross state product is an important measure of the total wealth in the state. But he said that the report’s findings do not accurately reflect current trends in Maryland’s economy.
“You need to look at the decade of the 1990s in two different segments,” said Ganguly. “The Maryland economy came out of the recession slower than the nation as a whole, but beginning in 1996 you will find a complete reversal of that trend. Maryland’s economy has consistently outperformed the national average [since 1996.]”
Ganguly said the Commerce Department’s figures correctly portray the impact of the recession, the defense cutbacks and downsizing in construction during the early 1990s. He pointed out that a late-1990s upswing in the high- technology sector has eased the effects of the earlier economic downturn. He said that currently Maryland is 11th in the country in job growth.
Anirban Basu, a Towson University economist, said that much of the state’s previous slump came before it transitioned from an “old economy” to a “new economy,” driven by high-technology industries. The manufacturing and agricultural sectors have shrunk while high-tech firms are continuing to expand.
The downside of that shift is seen on the farm. Ray Garibay, a statistician with the state’s Department of Agriculture, said that more and more of Maryland’s farmers are leaving agriculture or finding other jobs to supplement their farming income.
“We have seen middle-sized farms go out of business,” Garibay said. “This land is taken over by larger producers and part-time farmers.”
The total number of farms has decreased from approximately 13,000 in 1997 to 12,400 by 1999, he said.
Kathy Snyder, president and CEO of the Maryland Chamber of Commerce, had not reviewed the Commerce Department’s report, but her initial reaction concurred with Basu and Ganguly.
“I am a little surprised [by the report’s figures], but I can tell you that we were hit very hard by the recession,” Snyder said. “Maryland has come a long way and we have had tremendous success in the last couple of years.”
Snyder’s optimism is not shared by all. Robert Worcester, the president of Maryland Business for Responsive Government, said that the gross state product figures “really cast doubt on our position as one of the best states [economically.]”
He added that the real measure of an economy’s health is how well it does in bad times, not how well it does in good times.
– 30 – CNS 09-05-00