From Jim Richardson, Director, Harford County Office of Economic Development:
The government furlough, although facing delays, still promises to have quite an impact on the local economy. About 61 percent of workers at Aberdeen Proving Ground (APG) live in Harford County. That’s 13,200 of 22,000 Federal jobs at APG. While just four short years ago we were ecstatic about the 10,000 jobs BRAC would bring, today many of our residents are preparing to lose wages.
The current furlough time equates to nearly 15 percent of an employee’s salary. Defense contractors are already seeing reductions – some as furloughs and others as layoffs. So, if more than 13,000 people cut back in their spending over the next year, how will our local economy fare?
While the impact will be felt at our restaurants, retail and entertainment locations, as well as in real estate and banking, there are other sectors within the County that can buoy these markets. In the short-term, the rebounding housing market may take a little longer to rekindle itself or the retail market may grow more slowly, but we have not put all our eggs in one basket. Economic development in Harford County is about balancing all business sectors, including government. While we were busy welcoming BRAC jobs, we were just as busy prospecting other business growth opportunities.
One of the bright spots is the steadily growing distribution market. The recent signing of two leases, each over 500,000 square feet in Perryman, will bring major distribution centers to the area. In the manufacturing sector, Harford County is replicating the growth that is happening on a national level. We also have seen existing companies expand their presence in the County. Bizerba, Automated Coatings, Smiths Detection and Alcore have all grown in employment numbers, revenue and space.
In addition, smart companies are finding ways to diversify their products and services, as well as their workforces. Companies like Smiths Detection have expanded from just government-based detection equipment to airport security systems, x-ray systems and explosives detection for other users. Avon Protection Systems, another good example of market diversification, not only offers their global respiratory protection systems to the government market, but also to the law enforcement, industrial and firefighting markets.
Based on past history, we can also predict more entrepreneurial ventures. The greatest growth in our economy for the small business person follows an economic downturn. Why? It forces people to take that leap and work hard toward success. It sparks the spirit of entrepreneurism.
According to Entrepreneur Magazine, the biggest trends for small business start-ups in 2013 are in data storage, manufacturing, office space, management, beauty, energy drinks, digital health care and vending. These will be the next job creators, pushing our economy along steadily. The SurePayroll Small Business Scorecard survey for March 2013 (http://blog.surepayroll.com/march-2013-scorecard/) showed small business owners’ optimism rose to 68 percent, up from 59 percent in February. While small business hiring was down 1.4 percent and the average paycheck was down 0.1 percent compared to last year at this time, half of the small business owners surveyed said they plan to make new investments in their businesses in the second quarter, including new staff, technology and marketing. According to the Small Business Administration’s Office of Advocacy, companies with less than 500 workers had higher net job creation in three of the four quarters of 2011. Start-ups tend to remain successful even during severe recessions, seemingly because more people start their own companies due to layoffs or job losses.
Harford County has resources in place that can help both small business start-ups and current companies who wish to diversify. Facilities like the HBIC (Harford Business Innovation Center) and a new program called Ground Floor will provide resources for training, skills and the physical structure necessary to get fledgling companies or new departments off the ground. The Small Business Association (SBA) has a number of programs for budding entrepreneurs that will help in the start-up and growth process.
We have opportunities to develop new, thriving businesses and markets. With determination and innovation, we can face the furloughs and remain steady.