Labor Department: Maryland added 25,000 jobs in 2011

Unemployment rate drops to 6.7 percent in December

January 24, 2012|By Jamie Smith Hopkins, The Baltimore Sun

Maryland employers added nearly 25,000 jobs last year, according to new estimates — the best performance since 2006, but one that still leaves the state with more than 80,000 jobs to make up, given the recession's losses.

At this rate of employment growth, it will take Maryland until 2015 to dig out of the job-loss hole. Getting back to a truly normal employment situation would take even longer because population growth calls for the constant creation of new jobs.

Economist Richard Clinch thinks Marylanders shouldn't count on faster job growth this year because efforts to rein in the federal budget are rippling through the state's sizable base of government contractors. Unmanned aircraft maker AAI said Tuesday that it was immediately laying off 184 of its 1,650 workers in the Hunt Valley area to prepare for leaner times.

"The question is … what is going to replace the federal government as the driver of the Maryland economy?" asked Clinch, director of economic research at the University of Baltimore's Jacob France Institute.

A gain of 25,000 jobs in a year is "not a robust recovery," he said.

Still, the U.S. Department of Labor estimates released Tuesday suggest that the state's job market did make progress last year. Maryland employers had 24,700 more workers on their payrolls in December than they did a year earlier, compared with a 4,400-job gain in 2010 and a 67,000-job loss in 2009, when the recession officially ended.

The job figures, drawn from surveys, are preliminary. They could be substantially changed — up or down — when the labor agency incorporates additional employment information with its annual "benchmark" revisions in March.

As things stand now, almost 90 percent of the jobs added last year were in the private sector, the Labor Department estimated. Education and health services — a key sector for Maryland, with its major hospitals — was the biggest gainer. Those employers accounted for 10,000 of the new jobs.

The state appeared to end the year with more momentum than it started, considering that job gains and losses effectively canceled each other out in the first half of 2011. Maryland employers added jobs for the last four months in a row, the Labor Department said.

The unemployment rate, as high as 7.4 percent as recently as September, dropped to 6.7 percent in December as Marylanders found jobs both in the state and within commuting distance of it.

The jobless rate is the lowest since February 2009. But it's still much higher than what Maryland workers have been used to. The rate was under 4 percent for all of 2007.

Maryland's labor secretary, Alexander M. Sanchez, pointed to the improving numbers in recent months as a "sign that Maryland is progressing toward a full recovery." But he acknowledged that the state isn't there yet.

"We need to continue to accelerate our growth," he said Tuesday.

The University of Baltimore, which surveyed Maryland businesses at the end of last year, says 37 percent expected to add jobs this year while 9 percent anticipated cuts.

Kathleen T. Snyder, president and chief executive of the Maryland Chamber of Commerce, said she's hearing cautious optimism from businesses "that Maryland's economy is very slowly starting to recover from the recession."

But firms are worried about the effect that federal budget-cutting will have on the state, she said. And it's not just defense contractors that are nervous.

Leaders at biotech companies wonder if the National Institutes of Health grants that they rely on will dry up, she said. And companies with no direct exposure to the federal government are bracing for what they believe will be inevitable ripple effects in a state with so many connections to Uncle Sam.

"In the long term, I think we should all anticipate we're no longer going to be the golden child of the federal government as we have been for decades — that the world is changing and dependence on the federal government to keep our quality of life, to keep Maryland's economy going, is going to be changing, too," Snyder said. "This is the time to be promoting private-sector job creation and entrepreneurism."

The early estimates from the Labor Department suggest that many major sectors expanded in Maryland last year, but not all. The construction industry, hard hit by the housing bust, had 3,800 fewer jobs in December than it did a year earlier. Manufacturing continued its long slide, losing 1,800 jobs. And the financial activities sector ended the year with 600 fewer positions.

Besides education and health services, the biggest gainer was professional and business services, with 6,800 additional jobs.

That's a sector chock-full of government contractors, which have largely been pulling back rather than expanding. But Maryland did get new contracting jobs last year as the military finished its expansion at local bases for the years-long realignment and closure process known as BRAC.

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