The economy of the northeast U.S. is growing considerably more slowly than the nation as a whole, with only the Washington Baltimore metropolitan area outpacing the national average, according to a new Conference Board report.
The densely populated northeast region, which encompasses everything from Maine to Washington, D.C., still leads the nation in total personal income and will continue to do so for many years even if current trends persist.
But personal income growth in the region's metropolitan areas increased by only 1.7 per cent annually between 1969 and 1974, and the gain for the New York area - the linchpin of the region, with a population of 17 million , twice that of Sweden - was only 0.1 per cent for the entire five-year period. This poor showing by New York was attributed to "emigration and a very weak increase in productivity.
"This is what gives cause for alarm - that the leading part of the Northeast's economy was its weakest performer," according to the analysis, contained in "The Decline of the East," and article by Conference Board economist Juan De Torres which will appear in the next issue of the non-profit research organization's monthly magazine, Across the Board.
To underline the New York area economy, the federal government's Bureau of Labor Statistics this week reported that the unemployment rate of New York City averaged 11.2 per cent last year, up from 10.6 per cent in 1975, even though nationally the jobless rate declined to 7.7 per cent in 1976 from 8.5 per cent the year before.
The Washington-Baltimore area was the only part of the Northeast to buck the trend and to increase its share of personal income during the period, according to the analysis.
The two cities "are very different and complement each other," with Baltimore "mainly a transportation center" and Washington relying on its status as "a government town," as well as some printing and publishing to sustain its economy. "Together, they form one economic whole with twin centers that account for approximately 2.9 per cent of personal income," De Torres writes.
Of the two, "Washington has a much higher per capita income than Baltimore, 130 per cent of the national average compared with 103 per cent. Between 1969 and 1974, Washington increased its per capita income more rapidly than the national average rate of increase; this accounts for 75 per cent of the increase in its share of personal income."
NEW YORK's share of U.S. personal income dropped from 10.6 per cent in 1969 to 9.5 per cent in 1974 with declining productivity given as the major reason.
The report also relates New York's problems to its density and the fact that it is expensive for businesses to expand. On the other hand, New York provides unparalled access to transportation and communications facilities, and remains a good incubator for businesses that rely on innovation - such as the fashion industry - and that also must deal with uncertainty.
It notes that the New York environment is not "entirely distinctive," with the same pattern to be found in Los Angeles, Chicago, Philadelphia and San Francisco.
The article states that while the Northeast's share of personal income is decreasing, its markets still are expanding and offer considerable economic opportunities. Its main problems "can be attributed to sluggish gains in productivity" that have sapped per capita income.