City's job drain slows area hiring up

June 01, 1995|By Jay Hancock | Jay Hancock,Sun Staff Writer

Maryland's improving economy last year rubbed off on Baltimore, holding city job losses to their lowest level in five years, newly available statistics show.

At the same time, employment in Baltimore's suburbs reached a new high point, passing a pre-recession peak set in 1990, according to data from the U.S. Department of Labor.

The figures, which provide the best snapshot yet of the region's business climate last year, suggest that moderate job growth is in the cards for the rest of 1995, economists said.

Baltimore lost 2,900 jobs last year, a 0.7 percent decline. The last time Baltimore beat that performance was 1989, when it added 2,200 jobs to obtain a total work force of 472,900, according to government figures.

Since then the city has lost 61,900 jobs, as factories have shut down, businesses have gone bankrupt and corporate headquarters have moved. The size of Baltimore's work force last year was 411,000.

Economic development and employment in Baltimore have become key issues in the city's mayoral campaign. While losing 2,900 jobs in 1994 is an improvement over previous years, it's nothing for city leaders to brag about, economists said.

Employment now "is the lowest number of jobs in the city on record, going back to the immediate post-World War II period," said Charles W. McMillion, president of MBG Information Services, a Washington-based economics consulting firm.

"And the losses have been very broad-based -- 30 percent of retail; about 40 percent of construction; even finance, insurance and real estate has been hit pretty much across the board," he said.

Suburban employment continues to grow.

Last year the counties and cities surrounding Baltimore added 17,500 jobs, a gain of 2.6 percent, according to the new Labor Department data. Suburban employment of 702,200 last year surpassed the 1990 level of 690,100.

The economic recession of mid-1990 to early 1991 wiped out 17,800 suburban jobs before employment began to recover two years ago.

Taken as a whole, metropolitan Baltimore added 14,600 jobs last year, growing by 1.3 percent, to a total of 1.11 million, the Labor Department said. Many of the jobs were in commercial construction, service industries and health care.

Job growth in 1993 was 0.5 percent.

The region still has not surpassed its pre-recession peak, in 1989, of 1.14 million jobs, according to the government. And it seems to be growing more slowly than the state as a whole. Earlier this year, federal and state statisticians reported that Maryland added 42,500 jobs in 1994, an increase of about 2 percent.

But Michael Conte, head of the Regional Economic Studies Program at the University of Baltimore, said he believes the newly available regional figures sell the local economy short.

Job growth in metropolitan Baltimore last year was probably closer to 1.8 percent or 1.9 percent, a figure likely to emerge when the government adjusts its growth figures later, he said.

The new regional data is based on samples and not an absolute count of jobs.

In the past, Mr. Conte said, government surveyors have tended to miss jobs created by small and newly created companies -- just the kind of businesses that are helping drive Maryland's growth as defense contractors and other big employers continue to pare their payrolls.

Economists expect job growth in the region for the rest of 1995 in the range of 1 percent to 2 percent. But the future hangs heavily on two powerful institutions in Washington: the Federal Reserve and Congress.

A cut in short-term interest rates by the Fed could spur economic activity here and nationally; a rate increase would hurt job creation.

Local economists and business leaders also worry that drastic pruning of federal agencies, as many in Congress now intend, could severely hurt Maryland businesses and employees.

"I'm advising clients in the area to be cautious," Mr. McMillion said.

"This region is so dependent on the federal government. . . . I think that growth is slowing in this region from the 1994 days," he said.

But Mr. Conte believes Baltimore and Maryland could weather the government cuts. "We've had very significant federal job cuts each year for the last five years and have experienced significant [overall] job growth," he said.

Nevertheless, Mr. Conte added, "we see it as diminishing the rate of growth. Our leading economic index has not turned down. While we see a diminishing in growth, we still see positive growth for the region."

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