Maryland gains 5,900 jobs in October, Labor Department says

Private sector drives growth as government agencies cut

November 23, 2010|By Jamie Smith Hopkins, The Baltimore Sun

Maryland's private-sector employers picked up the pace in October, helping propel the state to a 5,900-job gain despite cuts by government agencies.

The U.S. Department of Labor estimated Tuesday that the private sector in Maryland added 7,000 jobs, from high-tech to retail. That's one of the highest one-month gains in the past five years and the biggest jump since employment began rebounding in March.

Government employment dropped by 1,100 jobs, the federal agency estimated. The figures, which are preliminary, are adjusted to account for seasonal fluctuations in hiring and layoffs.

Richard Clinch, director of economic research at the University of Baltimore's Jacob France Institute, said a bigger ramp-up for the holidays and the increase in government contracting associated with military base expansions probably helped drive the October numbers.

"That's a good month," he said. The fact that the growth comes entirely from the private sector is "even better" news, he added.

Among the employers hiring in October was Unleashed Technologies, a Columbia firm that designs, develops and manages websites and Web applications. It went from nine employees to 13 this fall. Michael Spinosa, the chief executive officer, expects to add two more people by the end of the year and more next year.

"We're hiring like crazy," he said Tuesday.

The state's unemployment rate was 7.4 percent in October, the Labor Department said. That's also what the agency now says the rate was in September, better than it originally thought.

But it revised downward its estimate for job gains in September, from 4,800 to 3,100.

The U.S. unemployment rate remained at 9.6 percent in October, significantly higher than in Maryland. Most states — 41, plus the District of Columbia — added jobs last month.

Though Maryland's economy outperformed the nation's during the deep recession and its aftermath, the state has struggled to get back on firm footing. Even with 28,000 jobs added over the last 12 months, Maryland still needs 80,000 more jobs just to return to pre-recession numbers.

Clinch doesn't expect Maryland will be able to sustain October's pace of growth unless the national economy picks up. And that could take a while, he said.

"Consumers lack confidence and are therefore not spending," he said. "So gains in economic output are going into savings."

Retailers are hopeful that consumers will spend a bit more freely this holiday season. Employers in the retail sector added 4,100 jobs in October, an unusually large number, according to Labor Department estimates.

Education and health services, a sector that includes some of the state's largest employers, added 4,300 jobs. Professional and business services, a mainstay sector for Maryland that ranges from computer programming to government contracting, added 3,000 jobs.

Some sectors cut — particularly leisure and hospitality, down 3,900 jobs, according to the federal estimates.

Direct Dimensions, an Owings Mills provider of engineering services, is on the growth side of the equation. It hired three people in the past month, including one on Tuesday. The company, which creates 3-D digital versions of real-life objects, buildings and people, is finding new demand for its models from companies renovating hospitals and other big facilities.

Michael Raphael, president and chief engineer of Direct Dimensions, said his firm's work is so specialized that it has helped immunize the company from the country's economic woes.

"We had our best year ever last year," he said, adding, "We're on track to exceed that."

Unleashed Technologies, the Columbia Web firm, has never seen a good economy — it was founded in 2007, at the beginning of the U.S. financial crisis. Spinosa said the recessionary start gave him a mind-set different from those of executives used to better times.

He said he opted for functional, not high-end, office space. Recent hiring came after a careful analysis of what the firm absolutely needed. And he doesn't count on credit, the lifeblood of so many businesses.

"I have no investors, no loans … no credit lines," Spinosa said. "Our growth is 100 percent from working from realized revenues."

jamie.smith.hopkins@baltsun.com

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