Maryland employers added 7,300 jobs in December, a strong end to a year with the most job creation since 2004, the federal government estimated Tuesday.
The state's businesses and government agencies added 36,000 jobs in 2013, modestly better than the year before despite losses in some months as federal contractors and other employers struggled with budget cuts under sequestration.
Most of the gains came in the private sector. Government agencies accounted for 300 of the jobs added last month and 1,900 of the jobs added last year, according to the U.S. Department of Labor estimates.
For a state with an outsized share of federal employees and contractors, last year was full of Washington-fueled angst — from the sequester to a partial government shutdown to fears of a U.S. debt default. But Maryland employers pulled off a normal level of hiring for the state, said Richard Clinch, a locally based research economist at Battelle Memorial Institute.
"The nonsense in Washington seems to possibly be over, so Maryland is recovering with the nation," he said.
There's still a way to go, even though the state — unlike the nation — has made up all of its recessionary job losses.
About 190,000 Marylanders were out of work last month and actively looking, roughly 92,000 more than six years earlier. Young adults continued to enter the labor force, swelling the pool of workers and would-be workers, as the state struggled to get out of the hole dug by the worst economic conditions since the Depression.
December's employment growth brought improvement for job-seekers. The state's unemployment rate fell to 6.1 percent last month from 6.4 percent in November, the Labor Department said.
Some of that unusually large decrease was fueled by Marylanders dropping out of the labor force. Clinch suspects that was partly driven by discouraged workers among the long-term unemployed and partly by retirements.
The Domino Sugar refinery in Baltimore, which has many workers with 30 and 40 years of service, saw an increasing pace of retirements last year. Most of the plant's 75 new hires last year replaced people who retired, said refinery manager Stu FitzGibbon.
Gov. Martin O'Malley used the refinery, which is undergoing a $20.5 million upgrade, as his backdrop to announce the December employment numbers.
"Those job numbers are good, they are positive, they are moving in the right direction," O'Malley said, while acknowledging that "there's more work to do."
Manufacturing is an area with a lot of ground to make up. The sector lost more than 20 percent of its positions since December 2007. Cuts last year amounted to 2,800 jobs, according to the most recent estimates.
Maryland Labor Secretary Leonard J. Howie III said manufacturing is a priority for the state's fledgling Employment Advancement Right Now effort, which gives grants to employer groups creating worker-training programs. Manufacturers are telling state officials that they have jobs they can't fill, Howie said.
"There's a gap in the skills level," he said.
A large chunk of Maryland's growth last year — about 15,000 of the 36,000 jobs — came in professional services, according to the Labor Department estimates. The sector includes a wide range of fields, such as lawyers, accountants and computer engineers. And because many federal contracting jobs fall there, the sector is a mainstay for the state.
Given federal difficulties last year, Clinch said, it's surprising that the sector added so many jobs. But contractors, expecting sequestration, had already pulled back before 2013, he said. He thinks a pent-up need to hire and more certainty about the federal budget late in the year helped propel that growth.
Other sectors that contributed to Maryland's employment growth last year included education and health services, up 8,100 jobs, and trade, transportation and utilities, up 7,800 jobs.
A quarter of the gains in one sector — finance — came from a single employer. Baltimore's T. Rowe Price Group added 259 jobs in the Baltimore region last year as the overall sector grew by 1,000 positions statewide.
Price, which like the stock market had a good year in 2013, employs about 4,100 people in the Baltimore area. Brian Lewbart, a Price spokesman, said the company has 250 openings. Most are in the region.
Construction, battered by the housing bust and recession, had its best year for hiring in Maryland since 2005. Employers in that sector added 4,100 jobs last year, the Labor Department said.
Clinch said a rise in construction permits suggests that this spring will be a good one for construction hiring.
But the challenge for the state, he said, is that it can no longer count on the federal government to drive growth.
"What will be important for the incoming administration is, how do we diversify our economy away from this reliance on federal spending?" he said.