Potomac Electric Power Co. had 466,659 Washington metropolitan area customers in October and 459,635 in October 1976. Incorrect figures were included in the Area Barometer table in Sunday's Business & Finance section.
When Washington area ground hogs come up for a look around the Potomac region on Feb. 2, they'll find little change in the economic outlook here from what was obvious when their winter nap began.
No weatherperson will say for sure what the climate will be like on Ground Hog Day, although Willard Scott could look back and tell you that it was clear and cold one year ago in the wake of the most severe winter weather of this century.
Similarly, local businessmen and women aren't willing to say much about what's ahead in 1978, other than the traditional optimism that arises naturally from doing business in one of the most affluent regions on earth.
They look back and note that, in the year just ended, the area economy experienced the first solid year of recovery from a bad recession. The national economic weakness demonstrated that while the Washington area may suffer less from downturns in the business cycle than most major urban centers, the local economy no longer is recession-proof.
Thus, Washington area business leaders are quite cautious and fearful that another economic slowdown could halt their modest, but renewed, growth. Although average incomes here are at the highest levels in American society, interest rates are rising along with taxes and utility bills, in a combined assault on family budgets that threatens a reduction in money available for luxuries.
And, investors in this investment-minded community are facing higher commissions from their brokers, instituted quietly in recent days. Rich or poor, it won't be easy to save much money this year, and area savings and loan associations have reported a outflow of money over recent months.
But caution is relative. Compared with most metropolitan areas, the Washington area economic outlook can be described as excellent, great, bullish or any other superlative you care to pick. There is no boom time ahead, similar to the 1960s, but there is every prospect for solid advance in employment, incomes spending and general business activity.
"I'm cautiously optimistic about 1978," says Edward Dixon, district manager for Zayre Corp., a retail chain. "The outlook for 1978 and for the ensuing decade is for continued moderate growth," adds Reid Thompson, chairman of Potomac Electric Power Co. "Slow but solid growth appears to be the forecast," notes James P. Goeden, executive vice president of the Bethesda-Chevy Chase Chamber of Commerce.
This general optimism reflects a high degree of local consumer confidence in an economy dominated by government payrolls. And there is evidence that metropolitan Washington will continue to grow in the next decade.
During the last eight weeks of 1977, Sindlinger & Co. found new reason to support its earlier claim that this area is, indeed, "the land of milk and honey and money."
Sindlinger surveyed some 10,000 households in 487 jurisdictions around the nation, including six area communities - the counties of Prince George's Montgomery, Arlington and Fairfax and the cities of Alexandria and Falls Church.
What the surveyors found was startling. While 60.9 per cent of household outside metropolitan Washington reported a positive flow of income based on money in hand and job security, the figure for suburban Washington was 87.9 per cent. When asked about current income levels, the same sharp difference was evident:
Income up in 85.7 per cent of D. C. suburban households vs. 31.1 per cent for the rest of the county.
Income down in 4.4 per cent of D. C. suburban homes vs. 23.4 per cent elsewhere.
Income the same in 9.9 per cent for D. C. suburban households vs. 45.3 per cent nationwide.
According to Sindlinger, who reported that national consumer confidence at the end of 1977 was at the highest level since early in 1976, there are "soft spots" underlying the recent surveys with nearly one in four households projecting fewer jobs in six months.
"Residents along the Detroit River who are managed by the bureaucrats from Potomac River may not have all that milk, honey and money for 1978 as they will have down by the Potomac where 0.9 per cent tell the other 99.1 per cent what they can or cannot buy," says Sindlinger in his latest report. He notes a decline in consumer plans nationwide for automobile purchases comparing those data with the upbeat mood of Washington suburbanities.
Although the recent survey didn't reflect attitudes of District of Columbia residents, report earlier in 1977 showed that the city's residents were far more pessimistic about their economic future than residents of suburban Maryland and Virginia.
More than two-thirds of the area's population, now estimated at about 3 million, lives in the suburbs. And the suburbs are where population growth is expected to continue through the mid-1980s. Northern Virginia, in particular, is today's boom region and local business leaders expect that suburban Maryland's population will be equaled by that of Northern Virginia for the first time, about 1985.
According to Alfred Hong, managing director of Marketing Economics Institute, Ltd., in New York, the Washington area will be the fastest-growing of the nation's 10 largest metropolitan areas between today and 1982. His organization has forecast and area population on Jan. 1, 1982, 3,175,000, or up 5.9 per cent from 1977.
In terms of jobs, the expanding trade association, professional, construction and retail-wholesale sectors are expected to absorb most newcomers to the labor market here. Area unemployment, estimated by the Washington Post to be about 4 per cent at the end of 1977, is about as low as a level as exists in America.
To be sure, a critical problem exists in the central city of Washington, where unemployment is still above 7 per cent. Programs designed to increase economic activity in the District will take several years, at least, to create the necessary number of new jobs. In the meantime, government and private firms are stepping up efforts at retraining and partial employment for youth.
Moreover, the current economic strength is expected to benefit the D. C. economy, in particular. A suburban boom of the 1960s is being succeeded by a growing city boom today.
Consumer prices here in 1977 jumped 7.8 per cent, or higher than the national average of 6.7 per cent for large urban areas. Area business leaders say they expect prices next year to increase at about the same rate; food price increases may be somewhat lower than the 8.7 per cent jump last year but in the housing sector, area residents must look forward to higher mortgage interest rates, repair and maintenance costs. Telephone, natural gas and electricity prices all are expected to move higher, some by substantial amounts.
Housing starts, which exceeded 24,000 in this area 1977, are expected to counter the predicted national downturn in 1978 and mount to nearly 30,000 units.
That's the current reading of housing economist Michael SUmichrast, a vice president of the National Association of Home Builders, who keeps close statistical tabs on this area's market.
"The 1977 total of 1.9 million for the nation will show that my projection was on the downside a year ago," he says. "Yet, my current reading is that total U. S. starts will drop to the 1.8 million level in 1978. However, on this metropolitan scene, our input shows that starts will increase by about 20 per cent and be in the range of 30,000 units in the new year. That includes upturns in both single and multi-family dwellings."
Unofficial reports from Fairfax officials, Sumichrast adds, indicate that housing starts could total 14,000 single homes next year. But the economist is predicting a tightening of mortgage credit in the latter part of the year. "Frankly, I fear overbuilding in Fairfax County."
In terms of office building and commercial real estate, most Washington professionals are bullish for 1978, pricipally because conditions have been extremely healthy in the latter part of 1977.
Nearly 2 million square feet of new office space is expected to hit the downtown market this year and leasing strenth has been sufficient to handle that input. However, some professionals are now showing concern about 1979, if the building pace continues.
Also contributing to this article was Washington Post staff writer John B. Willmann.