Bank Head Says Expect Small, Steady Economic Growth

Despite looming federal budget cuts and uncertainty overseas, a local bank head said he expects the national and local economy to gradually improve over the course of 2013. 

Mike Livingston, president of the Bank of Glen Burnie, said a number of economic indicators suggest the economy is continuing to climb out of the hole. But he cautioned that general uncertainty over federal budget cuts and the economy is still hurting consumer spending.   

"It's like when you find your car in a ditch. It doesn't really matter how you got there, just that you're coming out," he said. 

Livingston is also the chairman of the board of the Anne Arundel County Economic Development Corp. He spoke Tuesday at the monthly breakfast meeting of the West Anne Arundel County Chamber of Commerce in Gambrills. He pointed to a number of indicators suggesting that the county is experiencing slow but steady growth.

• Unemployment in the county is at 5.6 percent, lower than the state rate of 6.3 percent and the 7.7 percent unemployment nationally. 
• The average home price is now $375,000, nearing the level of prices before the crash in 2008. Real estate agents report good competition for homes in many neighborhoods. 
• Average household income in Anne Arundel County is $84,000, one of the highest in the nation. 
• Indicators including housing starts, industrial production and permit applications have all been rising gradually. 

Livingston noted that the presence of the federal government kept the area relatively insulated from the downturn in the economy after the market crash in 2008. But he said that might also mean the area will not rebound as quickly as other places, and said the economy is now vulnerable to the effects of the across-the-board federal budget cuts known as sequestration. 

"We have some headwinds, because we don't know what the total impact of that will be," he said. "We're going to feel it. How much? I don't know, but we're doing to have some uncertainty."

Livingston said inflation has been generally kept in check, but said many families may be experiencing what he calls "legislative inflation," or changes in policies that could lead to less money in people's pockets. He pointed specifically to the expiration of the payroll tax holiday as well as the possible increase in gas tax in Maryland. 

Moreover, Livingston said general uncertainty is still having an effect on consumer spending, which is a major driver of the economy. 

"Until we see a person confident in their job, confident in their financial situation, we're not going to be seeing people open up their wallets too much," he said.