State is a leader in job growth

2.2% gain in quarter helped by hot housing market

October 05, 2005|By JAMIE SMITH HOPKINS | JAMIE SMITH HOPKINS,SUN REPORTER

Maryland's job growth from April to June was faster than in all but eight other states, helped in part by the hot local housing market, the Federal Deposit Insurance Corp. said yesterday.

Employers in the state increased jobs by 2.2 percent compared with the second quarter last year. At the same time, Maryland's growth in home prices was nearly 23 percent, seventh-fastest in the nation, the FDIC said. Washington, D.C., ranked sixth.

"Housing activity has been quite strong in the area," said Kathy Kalser, regional manager for the federal agency's division of insurance and research in New York.

Economists don't think the high-octane fuel from the housing market will continue indefinitely, and not only because interest rates are projected to rise. Maryland's home price growth has so outpaced income growth that only five states are seeing a bigger gap, the FDIC said.

Kalser said there's anecdotal evidence nationally that homes are sitting on the market longer. That hasn't happened in the Baltimore region yet - at least not as of August, the most recent data from Metropolitan Regional Information Systems Inc. - but the market shows signs of slight easing nevertheless.

Average prices for existing-home sales in the region - which were about $310,000 that month - increased a bit less than 16 percent since August 2004. That growth, though historically strong, is the weakest performance of the year.

But thus far, Maryland's housing market and overall economy have been reinforcing each other.

"The construction industry is making the economy stronger, which is making the construction industry strong," said Richard P. Clinch, director of economic research at the University of Baltimore's Jacob France Institute.

Kalser said about 15 percent of Maryland's private-sector job growth last year came from residential construction, but many other factors are also driving the economy.

The federal government is a big one - especially now, because Maryland businesses benefit from the extra spending when Washington runs a deficit, Clinch said.

A variety of sectors are growing, from professional services to biotechnology.

"The good news for Maryland is there's no reason to expect it to turn down in the near term," Clinch said.

Job growth picked up speed in the state during the second quarter, lifting Maryland from its rank of 18th place nationally in the first three months of the year, the FDIC said.

In the first quarter, the rate of job growth was just under 2 percent.

The U.S. job base has been increasing about 1.7 percent this year.

"Maryland's job growth has accelerated for the past two years, and it's been exceeding the national average over the last year or so," Kalser said.

jamie.smith.hopkins@baltsun.com

The top 10

By job growth, second quarter 2004 to 2005:

1. Nevada, 6.5 percent

2. Arizona, 3.87 percent

3. Utah, 3.37 percent

4. Idaho, 3.36 percent

5. Oregon, 3.14 percent

6. Florida, 2.89 percent

7. Hawaii, 2.86 percent

8. Delaware, 2.29 percent

9. Maryland, 2.23 percent

10. Wyoming, 2.21 percent

[Source: FDIC]

Appreciation leaders

Top home price appreciation, second quarter 2004 to 2005:

1. Nevada, 28.14 percent

2. Arizona, 27.82 percent

3. Hawaii, 25.93 percent

4. California, 25.16 percent

5. Florida, 24.45 percent

6. Washington, D.C., 23.53 percent

7. Maryland, 22.98 percent

8. Virginia, 20.93 percent

9. New Jersey, 17.76 percent

10. Rhode Island, 16.72 percent

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