Blog post by Daraius Irani, Ph.D.
Daraius Irani, Ph.D. serves as vice president of strategic partnerships and applied research at Towson University. In this role, he fosters the development of partnerships between business, government and education that contribute to the economic vitality of the greater Baltimore region. For over 20 years, Irani has served in several senior leadership roles at Towson University. As vice president, Irani provides leadership and management to over 70 highly-skilled professionals who work on campus and in state agencies across Maryland.
As we start 2019, the economic pictures for Maryland and the nation remain strong. The economic recovery is currently in its tenth year, and the state has seen expanding job and GDP growth during this time. However, there are clouds on the horizon. Regional Economic Studies Institute’s (RESI) economic forecasts suggest that job growth will be robust in 2019, while 2020 and 2021 could fall into negative territory. Our models are capturing a slowdown for a variety of reasons:
We can see elements of these trends within Maryland’s economy as well. While still expanding, Maryland’s GDP grew less from 2016 to 2017 (+2.2 percent) than it did from 2015 to 2016 (+3.1 percent). In terms of employment growth, the most recent data from the Bureau of Labor Statistics show that Maryland companies created over 36,000 new jobs in 2018, while all levels of government added an additional 600 jobs; this 1.4 percent increase in total nonfarm employment is modest.
While Maryland’s unemployment rate of four percent is statistically no different than the national unemployment rate of 3.9 percent, the labor force participation rate for Maryland is about five percentage points higher than we see nationwide (67.6 percent in Maryland versus 62.8 percent for the U.S.). However, both remain below pre-recession levels for Maryland (69.6 percent) and the U.S. (66.6 percent). This presents a problem for both the state and nation: as we are seeing historically low unemployment levels, many firms are having difficulty finding qualified staff.
As we’ve seen, uncertainty is likely to contribute to ripples in the economy. While the near future looks to continue to be positive, longer term outlooks may be cloudier.