Morning Briefing: Maryland Business Activity Drops
More evidence that the economic downturn is hitting close to home emerged on Thursday. A survey of Maryland businesses in the month of October by the Federal Reserve Bank of Richmond found a steep decline in its index of general business activity.
Those surveyed by the bank reported sharp declines in sales and customer traffic and the bank said businesses also invested less in new equipment and software. It was the 11th straight month of declines in the Richmond Fed's general business activity index, which dropped to -53 in October from -31 in September. Any reading above zero measures growth.
Those surveyed also reported a sharp drop in sales, with that index falling to -57 from -28. The bank's customer traffic index declined sharply to -59 from -34.
The employment picture looked grim. The Maryland labor market weakened in October for the second consecutive month, according to the survey. Respondents said that employment and hours worked fell in October. The number of employees index dropped to -23 from -15, while the index of weekly hours fell to -36 from -23.
"The October figures are the lowest to date and are a marked departure from earlier readings," the Richmond Fed said in its report. "With the softer labor market, firms reported that increases in average wages remained moderate and that skilled workers were less difficult to find."
Expectations for future growth also fell across the board.
In other news, Prince George's Gaylord National Resort and Convention Center is embroiled in a court battle with 21 of its contractors. They are seeking payment for work they say is owed to them.
The contractors include the company that built the resort's signature 18-story glass atrium and another that constructed its Bellagio-style fountain. Flooring contractor Michael Butler told staff writer Ovetta Wiggins that he is owed $140,000.
"All of my vendors were paid for all of the materials, all of my employees were paid, but then I didn't get paid," he said. "I don't know how to explain what that does to a small business like mine. It's devastating."
Meanwhile a Belgian bank agreed to give Metro a reprieve from its efforts to collect $43 million from the agency, but only after a federal judge said she would be willing to issue an emergency order doing the same thing.
The KBC Group agreed not to seek payment for 10 days. Both sides will appear in court again on Nov. 12. The case stems from the failure of the large insurer American International Group. AIG had guaranteed Metro's financial deals with the bank, but the insurer's financial problems have invalidated that insurance.
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