Employment up despite slump

Late-year pickup in hiring contrasts with national slowdown as housing, financial tumult heighten fears of a recession

Maryland Jobs For 2007

January 19, 2008|By Jamie Smith Hopkins | Jamie Smith Hopkins,Sun reporter

The housing slump, mortgage-company turmoil and increasing fears of recession dampened job creation only modestly in Maryland last year, early numbers from the government suggest.

Businesses, nonprofits and government agencies added nearly 30,000 jobs last year, compared with about 32,000 in 2006, the Labor Department said yesterday. The numbers, which are annual averages, are preliminary and could be revised upward or downward - significantly so, some economists caution.

Maryland's employment growth isn't a boom-year sort of performance, such as in 2000 when employers added more than 60,000 jobs. And last year appears to be the first time the state has failed to top 30,000 jobs since 2003. But hiring picked up toward the end of the year, as U.S. job creation slowed.

Economic negatives aren't the only issues affecting state employment. The flip side: A large portion of the state's adults already have jobs, which makes it harder for employers to find people to hire.

Maryland's unemployment rate ticked downward to 3.8 percent, improving from 3.9 percent in 2006. That's what economists typically call "full employment."

"Let's face it, there's not a lot of surplus workers in Maryland," said Richard P. Clinch, director of economic research at the University of Baltimore's Jacob France Institute.

That might explain why Goodwill Industries of the Chesapeake had such a banner year helping people find work. The nonprofit placed nearly 2,300 people in entry-level and above entry-level jobs in 2007, up more than 50 percent from the year before.

"We've never had anything like this happen," said Phil Holmes, vice president of public policy and development for Goodwill. "It's just stunning."

Holmes said Goodwill saw strong demand for workers in transportation and logistics, retail and manufacturing - despite the overall loss of jobs in that last sector. But part of the reason Goodwill helped place so many people is that looking for work in today's high-tech environment is hard for lower-income workers to do on their own, he said.

"If you don't have ready access to the Internet, or if you're not really reasonably adroit in navigating the Internet, that's going to harm your job hunting," Holmes said.

Many economists are predicting a national recession this year. But Clinch thinks that Maryland will experience a slowdown rather than an actual decline, as proved true in 2001.

"I think Maryland will skate by without a recession because of the strength of the federal contracting sector," he said, noting that a lot depends on the length and severity of any U.S. downturn.

Hiring may be up overall, but some workers got bad news yesterday. Weyerhaeuser Co. said it is shuttering its Baltimore corrugated packaging facility, which employs 104, in mid-March. The decision was made for cost-cutting reasons, said spokeswoman Nancy Thompson, who was at the Biddle Street facility yesterday when workers were notified.

The international forest products company has two other facilities in Baltimore, one that makes residential and homebuilding products and another that specializes in recycling, she said. Some workers may be considered for jobs at other facilities, she said, while employees who are not retained will receive a severance package.

It's the sort of news that's old hat in Maryland. Jobs in the state's manufacturing sector dropped by 2,300 last year, the seventh straight year of declines.

The other sector posting cuts was information, down 400 jobs. That sector includes publishing, broadcasting and telecommunications.

The biggest gains came from Maryland's traditionally strong employers: professional and business services, up 8,600 jobs; education and health services, up 7,600 jobs; and leisure and hospitality, up 6,300 jobs.

The housing slump impact was most obvious in two sectors. Construction added 3,100 jobs, buoyed by commercial building but still far below the housing boom years. Financial activities, which includes lenders and mortgage brokers, squeaked by with a gain of 200 jobs.

Government added 3,300 jobs. The trade, transportation and utilities sector, which includes retailers, added 2,200 jobs. And the "other services" sector, a grab bag group of businesses ranging from pet care to dry-cleaning, added 1,000 jobs.

jamie.smith.hopkins@baltsun.com

Sun reporter Allison Connolly contributed to this article.

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