montgomery county quarterly economic indicators july 2019€¦ · montgomery county quarterly...

Montgomery County Quarterly Economic Indicators July 2019

1

The purpose of this report is to keep policy makers apprised of changes in

the national and local economies that

the Montgomery County Department of Finance

believes may impact current and/or future revenues and expenditures.

This report is also available through the Internet

on the Montgomery County Web Page:

http://www.montgomerycountymd.gov

For questions regarding this report, please contact:

David Platt

Chief Economist

Montgomery County Department of Finance

101 Monroe Street, 15th Floor

Rockville, Maryland 20850

Phone: (240) 777-8866

Email: [email protected]


2

INTRODUCTION

This quarterly report provides an analysis of national, state, regional, and

Montgomery County economic indicators for the second quarter of calendar year 2019, and

completed fiscal year 2019. For this report, data for the second quarter cover the April to

June period of the calendar year, and data for the fiscal year cover the July 2018 to June

2019 period. The data presented in this report are not seasonally adjusted to ensure

comparability among the national, state, regional and Montgomery County economic

indicators. Since the data are not seasonally adjusted, the comparative periods for the

quarterly data are the second quarter of this calendar year and the second quarter of

calendar year 2018. The only data that are seasonally adjusted are the national real gross

domestic product (GDP) and its components.

NATIONAL ECONOMY

According to the advance estimate by the Bureau of Economic Analysis (BEA), U.S.

Department of Commerce, real gross domestic product (GDP) increased at a 2.1 percent seasonally

adjusted annual rate during the second quarter of 2019. That increase followed an increase of 3.1

percent during the first quarter. The deceleration in the second quarter was attributed to downturns

in inventory investment, exports, and nonresidential fixed investment. These downturns were

partially offset by accelerations in consumer and federal government spending. Based on the Wall

Street Journal (WSJ) August survey of sixty economists, the average of the responses expects

economic growth to increase 2.0 percent during the current third quarter, and 1.9 percent during

the fourth quarter of this year. Based on the forecast for the next two quarters of 2019, the survey

of economists by The Wall Street Journal estimates that real GDP will increase 2.2-2.3 percent in

2019. The results of the survey also forecast an increase of 1.8 percent in 2020 and 1.6 percent in

2021. Following its June 2019 meeting, the Federal Open Market Committee (FOMC, Committee)

of the Board of Governors of the Federal Reserve System released its latest economic projections

from 2019 to 2021. Real GDP is expected to increase 2.1 percent in 2019, 2.0 percent in 2020,

and 1.8 percent in 2021.

Data released by BEA for the second quarter showed that the increase in real GDP was largely

attributed to an increase in personal consumption expenditures (↑4.3% - compared to an increase

of only 1.1% during the first quarter). Purchases of nondurable goods increased 6.0 percent and

purchases of durable goods were up 12.9 percent. Exports were down 5.2 percent and real non-

residential fixed investment decreased 0.6 percent which followed a 4.4 percent increase during

the first quarter. Federal spending was up 7.9 percent and state and local government spending

combined was up 3.2 percent However, residential real estate decreased during the second quarter

with residential fixed investment decreasing 1.5 percent which followed a decrease of 1.0 percent

in the first quarter and a decrease of 4.7 percent during the fourth quarter of 2018.


3

Real final sales of domestic product (real GDP less the change in private inventories) increased

5.4 percent in the second quarter compared to an increase of 3.7 percent during the first quarter.

Real final sales are a good measure of future production. If the growth rate in real final sales

exceeds the growth rate for GDP over an extended period of time, it indicates a continued

expansion of the national economy. For the second quarter, the percent increase in real final sales

(5.4%) was above the percent increase in real GDP (2.1%) which suggests continued growth in

real GDP through the remainder of 2019.

Sales of existing homes decreased 2.4 percent during the second quarter compared to the

second quarter of 2018. Median home prices for existing homes increased 4.3 percent year-over-

year during the second quarter of 2019 compared to a 4.7 percent increase during the same period

in 2018. The inventory level increased 1.3 percent during the second quarter compared to the same

quarter in 2018. That increase is the fourth consecutive quarterly decrease in inventory levels.

However, the National Association of Realtors (NAR) forecast the sales of existing homes to

decrease 0,2 percent in 2019 but increase 4.5 percent 2020. The Mortgage Bankers Association

(MBA), on the other hand, forecast that sales of existing homes will increase 0.6 percent and 1.5

percent in 2019 and 2020, respectively.

Monthly national employment, as measured by the survey of establishments (Current

Employment Statistics), averaged 151.6 million (not seasonally adjusted) during the second

quarter of this year – an increase of nearly 2.4 million or 1.6 percent from the second quarter of

2017. Employment reached over 150.3 million in fiscal year 2019 – an increase of over 2.5 million

or 1.7 percent from fiscal year 2018.

1.5%

3.7%3.0%

2.0%

-1.0%

2.9%

-0.1%

4.7%

3.2%

1.7%0.5% 0.5%

3.6%

0.5%

3.2% 3.2%

-1.1%

5.5%5.0%

2.3%3.2% 3.0%

1.3%0.1%

2.0% 1.9% 2.2% 2.0% 2.3% 2.2%3.2% 3.5%

2.6%3.5%

2.9%

1.1%

3.1%2.1% 2.0% 1.9% 1.9% 1.7% 1.8% 1.6%

-10.0%

-8.0%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%20

10:I

20

10:I

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est.)

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est.

)

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(est.

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20

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est.)

Pe

rce

nt C

ha

ng

e

Year:Quarter

Percent Change in Real GDP

SOURCE: Bureau of Economic Analysis, U.S. Department of Commerce. Hatched bars from Wall Street Journal survey conducted August 2019.

NOTE: Percent changes are at annual rates.


4

The unemployment rate during the second quarter stood at 3.5 percent (not seasonally adjusted)

and was an improvement from the 3.8 percent in the second quarter of 2018. For fiscal year 2019,

the unemployment rate declined 0.3 percentage points from 4.1 percent in fiscal year 2018 to 3.8

percent in fiscal year 2019. The July WSJ survey expects the jobless rate to be at 3.7 percent by

December 2019 but increase to 3.9 percent by December 2020 and 4.0 percent by December 2021.

The economic projections by the FOMC in June suggest that the unemployment rate will be at 3.6

in 2019 but increase slightly to 3.8 percent by 2021.

Inflation, as measured by the personal consumption expenditure (PCE) index, the preferred

measure of inflation used by the FOMC, is expected to increase from 1.8 percent in 2019 to 1.9

130,203 131,005133,082

135,209137,565

140,447143,122

145,520147,769

150,310

120,000

125,000

130,000

135,000

140,000

145,000

150,000

155,000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

No

nfa

rm E

mp

loym

en

t (i

n t

ho

usa

nd

s)

Fiscal Year

Total U.S. Nonfarm Employment(in thousands)

SOURCES: Bureau of Labor Statistics, U.S. Department of LaborMontgomery County Department of Finance

9.8% 9.3%8.5%

7.8%6.8%

5.7%5.0% 4.7% 4.1% 3.8%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Un

em

plo

yme

nt

Ra

te

Fiscal Year

U.S. Unemployment Rate



5

percent in 2020. The July WSJ survey suggests that inflation, as measured by the consumer price

index (CPI), will decrease slightly from 2.03 percent in December 2019 to 1.99 percent by

December 2020.

Subsequent to the July 30 - 31 meeting of the FOMC, they stated that “information received

since the FOMC (Committee) meeting in June indicates that the labor market remains strong and

that economic activity has been rising at a moderate rate. Job gains have been solid, on average,

in recent months, and the unemployment rate has remained low. Although growth in household

spending has picked up from earlier this year, growth of business fixed investment has been soft.

On a 12-month basis, both overall inflation and inflation for items other than food and energy are

running below 2 percent. Market-based indicators measures of inflation compensation remain

low; survey-based measures of longer-term inflation expectations are little-changed.” Based on

the review of the outlook for the economic activity and the labor market, the Committee voted to

lower the target range for the federal funds to 2.00-2.25 percent.

Following its June meeting, the FOMC released its latest forecast of rate increases - the “dot

plot”. The median of responses indicated lowering the target federal funds rate from 2.4 percent

in 2019 to 2.1 percent in 2020, but increasing the target range to 2.4 percent in 2021 and 2.5 percent

thereafter.

After the July 30-31 meeting of the FOMC, the Chicago Mercantile Exchange’s implied

probability data, the next rate decrease would occur in September followed by another decrease in

December. The August WSJ survey projects on average that the federal funds rate will be 1.99

December 2019 and 1.85 percent by December 2020.

After experiencing strong performance during the first quarter of 2019 that followed a

correction during the fourth quarter of 2018, the returns in the stock market decelerated during the

second quarter. The Dow-Jones Industrial Average (DJIA) was up a modest 2.60 percent in the

second quarter compared to an increase of 11.2 percent in the first quarter; the Standard & Poor’s

500 (S&P 500) increased 3.8 percent compared to an increase of 13.1 percent increase in the first

0.00%0.25%0.50%0.75%1.00%1.25%1.50%1.75%2.00%2.25%2.50%2.75%3.00%3.25%3.50%3.75%4.00%

Jan-09

Apr-09

Jul-09

Oct-09

Jan-10

Apr-10

Jul-10

Oct-10

Jan-11

Apr-11

Jul-11

Oct-11

Jan-12

Apr-12

Jul-12

Oct-12

Jan-13

Apr-13

Jul-13

Oct-13

Jan-14

Apr-14

Jul-14

Oct-14

Jan-15

Apr-15

Jul-15

Oct-15

Jan-16

Apr-16

Jul-16

Oct-16

Jan-17

Apr-17

Jul-17

Oct-17

Jan-18

Apr-18

Jul-18

Oct-18

Jan-19

Apr-19

Jul-19

Oct-19

Jan-20

Apr-20

Fed

Fu

nd

s R

ate

Date

Effective Federal Funds Rate (solid bars) and Federal Funds Futures (hatched bars)

SOURCES: Federal Reserve Bank of St. Louis (solid bars) and the

Chicago Mercantile Exchange (hatched bars) as of August 12, 2019


6

quarter; the NASDAQ also continued to increase in the second quarter with an increase of 3.6

percent compared to an increase of 16.5 percent during the first quarter; and the Russell 2000

increased a modest 1.7 percent in the second quarter that followed an increase of 14.2 percent in

the first quarter. Overall, all four indices increased during the first half of 2019. Since the end of

the second quarter, all four indices experienced modest increases in July.

STATE AND REGIONAL ECONOMY

According to the latest data from BEA, real gross domestic product, or gross state product, for

Maryland increased 1.8 percent during the first quarter of this year compared to an increase of 1.2

percent during the fourth quarter of last year and an increase of 0.4 percent during the first quarter

of 2018. The increase was attributed to a 12.9 percent increase in retail trade, a 4.8 percent increase

in the information sector, an 8.5 percent increase in the finance and insurance industry, and a 6.6

percent increase in health care and social assistance.

According to payroll employment data from the Bureau of Labor Statistics (BLS), U.S.

Department of Labor and based on the survey of establishments, monthly payroll employment in

the State of Maryland averaged 2.775 million during the second quarter of 2019 – an increase of

0.5 percent from the second quarter of 2018. In fiscal year 2019, payroll employment in Maryland

reached nearly 2.752 million - an increase of 0.6 percent from fiscal year 2018.

-3.2%

3.7%3.2%

5.1%

3.8%3.9%

2.3%

5.9%

-2.0%

4.5%

0.8%

1.9%

0.7%

-3.8%

2.3%

-4.9%

5.0%

-2.8%

1.2%1.2%

-1.6%

5.8%

3.4%

-2.6%

3.5%

1.1%1.4%

2.5%3.1%

5.9%

2.1%

3.6%

-0.7%

2.9%

1.2%

2.8%

0.4%

3.7%

-0.9%

1.2%1.8%

-8.0%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

2009:Q1

2009:Q2

2009:Q3

2009:Q4

2010:Q1

2010:Q2

2010:Q3

2010:Q4

2011:Q1

2011:Q2

2011:Q3

2011:Q4

2012:Q1

2012:Q2

2012:Q3

2012:Q4

2013:Q1

2013:Q2

2013:Q3

2013:Q4

2014:Q1

2014:Q2

2014:Q3

2014:Q4

2015:Q1

2015:Q2

2015:Q3

2015:Q4

2016:Q1

2016:Q2

2016:Q3

2016:Q4

2017:Q1

2017:Q2

2017:Q3

2017:Q4

2018:Q1

2018:Q2

2018:Q3

2018:Q4

2019:Q1

Pe

rce

nt C

han

ge

Year: Quarter

Percent Change at Annual Rate in Quarterly Real Maryland Gross State Product

SOURCE: Bureau of Economic Analysis, U.S. Department of Commerce


7

According to the labor force data, the State’s resident employment increased 1.2 percent from

3.075 million during the second quarter of 2018 to 3.112 million in the second quarter of this year.

The State’s unemployment rate decreased from 3.9 percent in the second quarter of 2018 to 3.6

percent in the second quarter of this year. On a fiscal year basis, employment increased 0.7 percent

and the unemployment rate declined from 4.2 percent in FY2018 to 3.8 percent in FY2019.

0.0

500.0

1,000.0

1,500.0

2,000.0

2,500.0

3,000.0

3,500.0

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Em

plo

ym

en

t (t

ho

usa

nd

s)

Fiscal Year

Nonfarm Payroll Employment and Resident Employment (Labor Force)

State of Maryland

Payroll Resident


7.5% 7.4% 7.1% 6.9%6.2%

5.5%4.7% 4.4% 4.2% 3.8%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Ue

mp

loym

en

t R

ate

Fiscal Year

Unemployment Rate State of Maryland



8

Monthly payroll employment for the Silver Spring-Frederick-Rockville (SSFR) metropolitan

division averaged 600,900 during the second quarter and was slightly above the average

employment level in the second quarter of 2018 (↑0.2%). However, that rate of growth was below

the second quarter growth rate for the State (↑0.5%). On a fiscal year basis, payroll employment

increased 0.3 percent over FY2018 to 596,400. Resident employment, as measured by the

household survey, averaged over 668,300 during the second quarter – an increase of 0.8 percent

over the second quarter of 2018. On a fiscal year basis, resident employment was over 665,300 in

FY2019 – an increase of 0.5 percent.

The unemployment rate for the division is either the lowest or one of the lowest among the 34

national metropolitan divisions and the monthly average was 3.0 percent during the second quarter

of 2019 – slightly below the rate during the second quarter of 2018 (3.3%). For fiscal year 2019,

the unemployment rate was 3.1 percent compared to 3.4 percent in fiscal year 2018. Both the

unemployment rates for the second quarter and the fiscal year were below the State’s

unemployment rates.

0.0

100.0

200.0

300.0

400.0

500.0

600.0

700.0

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Empl

oym

ent

Fiscal Year

NonFarm Employment and Resident Employment (Labor Force)

Silver Spring-Frederick-Rockville Metropolitan Division

Payroll Resident



5.9% 5.6% 5.4% 5.3%4.8%

4.3%3.7% 3.5% 3.4% 3.1%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Une

mpl

oym

ent R

ates

Fiscal Year

Unemployment Rates Silver Spring-Frederick-Rockville Metropolitan Division



9

The resale housing market across the region experienced growth in prices, on a year-over-year

basis, between May 2018 and May of this calendar year. Based on the S&P/Case-Shiller® Home

Price Index for the Washington region, prices in May increased 2.9 percent over the twelve-month

period.

As measured by the Consumer Price Index for All Urban Consumers (CPI-U), inflation in the

Washington Metropolitan Statistical Area (MSA) increased an estimated 1.4 percent on a year-

over-year basis in June of this year over June 2018. On a fiscal year basis, the CPI-U increased

1.6 in FY2019. Consumer prices excluding food and energy purchases (Core CPI) were up 1.3

percent in the area (on the same year-over-year basis) and up 1.7 percent for the fiscal year.

-30.0%

-20.0%

-10.0%

0.0%

10.0%

20.0%

30.0%

Jan-

05A

pr-0

5Ju

l-05

Oct

-05

Jan-

06A

pr-0

6Ju

l-06

Oct

-06

Jan-

07A

pr-0

7Ju

l-07

Oct

-07

Jan-

08A

pr-0

8Ju

l-08

Oct

-08

Jan-

09A

pr-0

9Ju

l-09

Oct

-09

Jan-

10A

pr-1

0Ju

l-10

Oct

-10

Jan-

11A

pr-1

1Ju

l-11

Oct

-11

Jan-

12A

pr-1

2Ju

l-12

Oct

-12

Jan-

13A

pr-1

3Ju

l-13

Oct

-13

Jan-

14A

pr-1

4Ju

l-14

Oct

-14

Jan-

15A

pr-1

5Ju

l-15

Oct

-15

Jan-

16A

pr-1

6Ju

l-16

Oct

-16

Jan-

17A

pr-1

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l-17

Oct

-17

Jan-

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pr-1

8Ju

l-18

Oct

-18

Jan-

19A

pr-1

9

Y-o

-Y P

ct. C

hg.

Month.Year

Year-over-Year Percent Change in

S&P/Case-Shiller® Home Price Index

Washington MSA

NOTE: S&P/Case-Shiller price index is a registered trademark of Standard and Poor's.

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

2,0

09.

01

2,0

09.

04

2,0

09.

07

2,0

09.

10

2,0

10.

01

2,0

10.

04

2,0

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07

2,0

10.

10

2,0

11.

01

2,0

11.

04

2,0

11.

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2,0

11.

10

2,0

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2,0

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12.

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2,0

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2,0

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2,0

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2,0

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10

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2,0

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04

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2,0

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2,0

17.

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2,0

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2,0

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04

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2,0

18.

10

2,0

19.

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2,0

19.

04

Y-o

-Y

Pct

. C

hg

.

Year-over-Year Percent Change in Consumer Price Index

Washington MSA

All Items

SOURCE: Bureau of Labor Statistics, U.S. Department of Labor


10

According to the Stephen S. Fuller Institute (Institute) in its July report, “the Washington

region’s Coincident and Leading Indices were both positive in May building on gains in April.

The Coincident Index registered strong gain in May, its 62nd consecutive monthly over-the-year

increase, and the Leading Index was up slightly in April extending its positive trend to a second

month in contrast with its negative trend dating bank to July 2018. As in April, all of the

Coincident Index’s four components and three of the Leading Index’s components contributed to

this overall positive performance. Still, the Leading Index’s weak but positive performance in

May continues to leave open the question regarding the economy’s future performance.”

The Washington Coincident Index, which represents the current state of the metropolitan area

economy, increased 1.23 percent from April to May and all four components of the index increased

on a month-over-year basis. On the month-over-year basis, May’s Coincident Index increased

2.21 percent from May 2018. Total wage and salary employment, domestic airport passenger

volume, purchases of nondurable goods, and consumer confidence all increased on a month-over-

year basis.

According to the Institute, “the Washington Leading Index, which is designed to forecast the

performance of the metropolitan area economy six to eight months in advance, increased by 0.25

percent in May on a monthly over-the-year basis registering its second consecutive gain and only

the third increase since June 2018.” Three of the Leading Index’s four components contributed

to the increase: consumer expectations, total residential building permits, and durable goods

retail sales.

80.0

85.0

90.0

95.0

100.0

105.0

110.0

115.0

Jan-0

1

Jul-01

Jan-0

2

Jul-02

Jan-0

3

Jul-03

Jan-0

4

Jul-04

Jan-0

5

Jul-05

Jan-0

6

Jul-06

Jan-0

7

Jul-07

Jan-0

8

Jul-08

Jan-0

9

Jul-09

Jan-1

0

Jul-10

Jan-1

1

Jul-11

Jan-1

2

Jul-12

Jan-1

3

Jul-13

Jan-1

4

Jul-14

Jan-1

5

Jul-15

Jan-1

6

Jul-16

Jan-1

7

Jul-17

Jan-1

8

Jul-18

Jan-1

9

Ind

ex

Month-Year

Washington MSA Monthly Coincident Economic Indicator and Six-Month Moving Average

Coincident Six_Month

SOURCE: Center for Regional Analysis(CRA), George Mason UniversityNOTE: Coincident indicator respresents the current state of the economy and includes

total w age and salary employment, consumer confidence, domestic airport passengers, and purchases of nondurable goods.


11

MONTGOMERY COUNTY

ECONOMIC INDICATORS

Montgomery County’s economy experienced a mixed economic performance during fiscal

year 2019. The reasons for a mixed performance include an increase in resident employment, a

decrease in the unemployment rate, a decrease in existing home sales, and an increase in median

prices for an existing home. Residential construction experienced a decrease in single-family

homes but an increase in multi-family units. Construction in the number of non-residential projects

decreased but the value of added non-residential projects increased.

Employment Situation

Based on data from the Maryland Department of Labor, Licensing and Regulation (DLLR),

the Bureau of Labor Statistics, U.S. Department of Labor, the County’s resident employment for

the second quarter increased by nearly 4,500 from the second quarter of 2018 (↑0.8%). On a fiscal

year basis, resident employment was 539,000 in fiscal year 2019 compared to 536,000 during the

previous fiscal year – an increase of slightly more than 3,000 or 0.6 percent.

85.0

90.0

95.0

100.0

105.0

110.0

Jan-0

1

Jul-01

Jan-0

2

Jul-02

Jan-0

3

Jul-03

Jan-0

4

Jul-04

Jan-0

5

Jul-05

Jan-0

6

Jul-06

Jan-0

7

Jul-07

Jan-0

8

Jul-08

Jan-0

9

Jul-09

Jan-1

0

Jul-10

Jan-1

1

Jul-11

Jan-1

2

Jul-12

Jan-1

3

Jul-13

Jan-1

4

Jul-14

Jan-1

5

Jul-15

Jan-1

6

Jul-16

Jan-1

7

Jul-17

Jan-1

8

Jul-18

Jan-1

9

Ind

ex

Month-Year

Washington MSA Monthly Leading Economic Indicator

and Six-Month Moving Average

Leading Six_Month

SOURCE: Center for Regional Analysis(CRA), George Mason UniversityNOTE: Leading indicator is designed to forecast economic performance six to eight months in

advance and includes residential building permits, consumer expectations, help w anted index, initial claims for unemployment insurance, and purchases of durable goods.


12

The County’s average monthly unemployment rate during the second quarter was 3.0 percent

and below the rate during the second quarter of 2018 (3.2%). In fiscal year 2019, the

unemployment rate was 3.1 percent compared to fiscal year 2018 (3.3%). Throughout fiscal year

2019, the County’s unemployment rate remained one of the lowest in the State.

496,983

506,690509,931

514,958517,901

523,404 525,234529,997

535,799538,818

470,000

480,000

490,000

500,000

510,000

520,000

530,000

540,000

550,000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Em

plo

ymen

t

Fiscal Year

Resident Employment (Labor Force) Montgomery County


5.7% 5.4% 5.2% 5.1%4.6%

4.2%3.6% 3.4% 3.3% 3.1%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Un

em

plo

ym

en

t R

ate

s

Fiscal Year

Unemployment Rates Montgomery County



13

Construction Activity

Construction of single-family residential units decreased during the second quarter of 2019

compared to the second quarter of 2018. Construction of single-family homes declined 5.0 percent

but construction of multi-family units increased 15.9 percent. Overall with the increase in multi-

family units that offset the decrease in single-family units, total construction of residential units

increased 13.6 percent in the second quarter over the second quarter of 2018. Residential

construction starts added a total value of $326.3 million during the second quarter compared to

$358.1 million during the second quarter of last year (↓8.9%). On a fiscal year basis, the number

of new residential construction starts increased 21.3 percent in fiscal year 2019 largely attributed

to the increase in multi-family units (↑77.5%) and the total value added was $1,025 million which

was 25.5 percent above FY2018 and largely attributed to the total value added by multi-family

homes (↑49.6%).

During the second quarter of 2019, the number of non-residential starts (projects) increased

nearly 15.4 percent from the second quarter of 2018. The total value increased from $343.6 million

to $446.4 million (↑29.9%). On a fiscal year basis, the number of non-residential projects

decreased 4.2 percent but the total added value increased from $1,137.9 million to $1,535.7 million

from fiscal year 2018 to fiscal year 2019 – an increase of 35.0 percent.

1,056

2,2752,825

3,9954,553

4,9415,230

4,394 4,475

5,429

$0

$200,000,000

$400,000,000

$600,000,000

$800,000,000

$1,000,000,000

$1,200,000,000

0

1,000

2,000

3,000

4,000

5,000

6,000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Valu

e (

$000)

Un

its

Fiscal Year

New Residential Construction Starts: Units and Value (Montgomery County)

Units Value

SOURCES: McGraw-Hill ConstructionMontgomery County Department of Finance


14

Residential Real Estate

During the second quarter of this calendar year, existing home sales decreased 3.6 percent on

a year-over-year basis following a decrease of 0.4 percent during the second quarter of 2018.

However, median sales prices for existing homes increased a modest 1.6 percent during the second

quarter 2018 following an increase of 5.8 percent during the second quarter of 2018. On a fiscal

year basis, sales of existing homes decreased 7.1 percent but median prices increased 2.9 percent.

Retail Sales

Using sales tax receipts as a measure of retail sales activity in the County, retail sales increased

1.8 percent in fiscal year 2019. In FY2019, purchases of nondurable goods, which include food

and beverage, apparel, general merchandise, and utilities and transportation, increased 0.4 percent

during this period and sales of durable goods were up 3.6 percent. The increase in nondurable

goods purchases was largely attributed to the increase in purchases of apparel items (↑8.8%), while

the increase in purchases of durable goods was largely attributed to an increase in automotive

(↑7.2%), building and industrial supplies (↑3.6%), and furniture and appliances (↑1.2%).

CONCLUSION

11,0809,457 9,206

10,255 10,817 11,15012,315 12,644 12,227

11,359

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019

Sale

s

Fiscal Year

Sales of Existing Homes

Montgomery County

SOURCES: Metropolitan Regional Information System, Inc.

Montgomery County Department of Finance

$402,752$416,843

$436,289 $431,411 $435,303$453,520 $457,864

$468,996$461,387

$469,917

$300,000

$320,000

$340,000

$360,000

$380,000

$400,000

$420,000

$440,000

$460,000

$480,000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Sale

s Ta

x Re

ceip

ts ('

000$

)

Fiscal Year

Total Sales Tax Receipts Montgomery County

SOURCES: Maryland State ComptrollerMontgomery County Department of Finance


15

The major economic indicators confirm that the County’s economy experienced mixed

economic performance during fiscal year 2019. Employment measured by the survey of

households increased 0.6 percent, and the unemployment rate at 3.1 percent was a decrease from

fiscal year 2018. Residential construction increased for multi-family homes but decreased for

single-family homes. Sales of existing homes declined 7.1 percent but median prices were up 2.9

percent during the fiscal year compared to last fiscal year.

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