Montgomery County Lost Brick-and-Mortar Businesses Last Year

Preliminary data shows sluggish economy

By Dan Schere

Montgomery County had sluggish employment growth in employment and a net loss in businesses in 2018, according to preliminary data from the Bureau of Labor Statistics (BLS).

Employment in Montgomery County grew by 0.5% in 2018, or 2,121 jobs. The 2018 growth rate is slightly lower than the average rate in the county of 0.7% from 2010-17.

By comparison, in 2018 Arlington County grew at a rate of 0.9%, Fairfax County by 1.8% and Loudoun County by 2.8%.

Employment in the Washington region grew by 1.0%, or 31,177 jobs, in 2018. Montgomery County lagged behind every major jurisdiction in the region in job growth last year except for Prince George’s County and Alexandria City.

In addition, there was a net loss of businesses located in the county in 2018, according to BLS. The county lost a net of 94 establishments between 2017 and 2018, for a decrease of 0.3%. Between 2010 and 2017, the county added businesses at an average rate of 0.1%.

By comparison, in 2018 Fairfax County added 117 businesses, for a growth rate of 0.3%, and the Washington area added 791 businesses, for a 0.3% growth rate.

Montgomery County was not the only jurisdiction to lose establishments last year. The District of Columbia, Alexandria City and Arlington lost them as well.

David Petr, the CEO of The Montgomery County Economic Development Corp, a public-private partnership that replaced the county’s economic development department in 2015, said the BLS data are one of several economic indicators the agency looks at.

“It’s worth noting that establishments data can change annually based upon the accounting practices of large companies and franchises,” Petr wrote in an email. “It’s also worth noting that sole proprietorships and some family operated and owned companies do not have to file unemployment insurance, which is where BLS derives its data,” Petr wrote.

Petr, who will be stepping down in September, also noted that the county raised $588 million in venture capital last year, which was more than any other suburban jurisdiction in the region.

David Blair, a candidate in last year’s county executive Democratic primary who once owned a healthcare technologies business here, said Monday that the trend of northern Virginia’s business growth outpacing Montgomery County’s has been occurring for 10 years, and that the BLS statistics illustrate what he believes are longstanding issues with the county’s business climate.

“It’s scary. Our challenges are continuing to grow,” he said. “The most practical way to fund our growth is through new business development, which means we’ll be stuck with having to raise taxes again.”

Blair said once when he wanted to move a business he owned due to an expiring lease, he was forced to pay more than $3,000 to hire a firm to facilitate the move. Blair said he had the option of moving to other states with less restrictive permitting processes.

“We were heavily courted by Virginia and North Carolina,” he said.

Blair also said when he and his wife Mikel opened Badlands, a children’s play space two years ago in Rockville, they were told “inconsistent information” by permitting inspectors prior to opening.

“One inspector came and said you’re going to have to put a hood over the coffee maker and we had to get a contraption to come down from the ceiling. And then another said a bar top would be OK,” he said.

Adam Pagnucco compiled data for this column