Md. jobs grew by 1,000 in August

Tepid gain is relief after earlier decline

housing is a worry

September 21, 2006|By Jamie Smith Hopkins | Jamie Smith Hopkins,Sun reporter

Maryland employers added 1,000 jobs last month, tepid growth but a reason for optimism after losses earlier in the summer, economists said.

Numbers released yesterday also showed that the state's soft patch wasn't as bad as the federal government originally thought. Employers added 700 jobs in July rather than cutting 1,000, according to revised statistics; job cuts totaled 1,100 in June. The numbers are adjusted for seasonal variations to allow for month-to-month comparisons.

The state's unemployment rate also improved, falling to 4.1 percent last month from 4.3 percent in July.

These revisions are good news, said Rakesh Shankar, a senior economist at Moody's "We've been worried about the pace of slowdown in Maryland the past couple of months," Shankar said. Now, he said, "we've noticed it isn't as bad as we thought it was."

Economists have blamed the downshifting job growth in the state on the housing market slowdown, and they warn that Maryland isn't out of the woods just yet. As sales have decreased sharply, local homebuilders have cut staff. Retailers are feeling the pinch, too, because there are fewer homebuyers in need of furniture and accessories. And with home values rising much more slowly, fewer homeowners feel wealthy enough to spend hand over fist.

Moody's, which thinks prices rose too fast in the Baltimore-Washington area, has predicted another year of market discomfort here. There could be a continued economic slowdown as a result, Shankar said.

If that happens, the turning point will probably come when military and contractor jobs from the base realignment and closure process - known as BRAC - begin trickling in next year, said Daraius Irani, director of applied economics at RESI, Towson University's research and consulting arm. "Some of the contractors are already beginning to set up shop," Irani said. "As the BRAC jobs begin to [get] traction, I think that then we'll begin to see a reversal of this jobs slowdown."

Employers in the state added 35,800 jobs during the 12 months ending in August, according to the U.S. Labor Department. Because they are year-over-year numbers, they are not seasonally adjusted. They're showing a deceleration in growth - the year-over-year average earlier in 2006 topped 38,000 - but the trend remains good for a state in the northern half of the East Coast, Shankar said.

The biggest employment gains in the past 12 months came from Maryland's traditionally strong sectors.

Education and health services added 12,100 jobs. Professional and business services grew by 10,900, while leisure and hospitality added 6,000.

The construction sector added 1,600 jobs in the past 12 months, a sign that commercial building is helping to offset weakness in homebuilding.

Trade, transportation and utilities, the sector that includes retailers, was down by 800. And manufacturing continued to shed jobs - 2,300 in total.

The manufacturing industry is facing challenges nationwide. But Mike Galiazzo, executive director of the Regional Manufacturing Institute, a local nonprofit, said most manufacturers he talks to here are hiring. The catch is that it's generally to fill existing jobs, not to add new ones.

Defense-contractor manufacturers are the exception.

"Northrop Grumman is constantly looking for people - constantly," Galiazzo said, referring to an employer who is already one of Maryland's largest.

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