Maryland’s economy is showing troubling signals. A new analysis places Maryland among the states already in, or at high risk of, recession.
A new state-by-state analysis from Moody’s Analytics Chief Economist Mark Zandi shows a patchwork national economy, with states falling into three categories: expanding, treading water, or in recession/high risk.
According to Zandi, the findings place Maryland squarely in the “recession/high risk” category, underscoring the vulnerabilities of counties that heavily depend on income, property, and transfer tax revenues.
Zandi explains that his assessment of state economies is based on “coincident measures” of current economic activity, including payroll employment, household employment, industrial production, and other real-time data.
The Three Categories
- Expansion (Green): Approximately one-third of states, led by Texas, Florida, and the Carolinas, continue to experience growth. These states represent a large share of the national GDP, but even their growth has slowed.
- Treading Water (Yellow): States like California, New York, and Michigan, together accounting for a considerable portion of the US economy, are flat. Their stability is crucial in preventing a national recession.
- Recession/High Risk (Red): States spread across regions, from Massachusetts to Mississippi, show consistent declines across key indicators. Maryland, Virginia, Delaware, and the District of Columbia all appear here, making the broader DC region stand out as especially weak.
Maryland’s Unique Vulnerability
Federal employment and contracting anchor Maryland’s economy, creating unique risk when Washington pulls back. Job losses in the federal workforce ripple quickly through local economies — from housing markets to small businesses — and erode county tax bases.
The Bigger Picture
According to Zandi, nationally, nearly one-third of US GDP now comes from states in or near recession. Another third are flat.
Southern states, such as Texas, Florida, and the Carolinas, continue to expand, albeit at a slower pace. The stability of California and New York, which together account for more than one-fifth of US GDP, is critical to whether the country avoids a broader downturn.
