www.baltimoresun.com/business/bs-bz-maryland-jobs-june-20110722,0,3637923.story

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Maryland's employment picture still dour in June

State ties for fastest rate of annual job loss in nation

By Jamie Smith Hopkins, The Baltimore Sun

7:15 PM EDT, July 22, 2011

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Maryland tied for the fastest pace of job loss in the past year in June, the federal government estimated Friday, the second month in a row that the state was at or near the bottom of the heap.

The state's unemployment rate — which had been trending downward for months — hit 7 percent in June, up from 6.8 percent in May, the U.S. Department of Labor reported. It was the first time the jobless rate had risen since January 2010.

Maryland lost nearly 15,000 jobs over the past 12 months, spread across most major sectors, according to the agency's estimates. That loss was slightly more than half a percent of the employment base, worst in the country alongside Kansas, with Delaware, Georgia and the District of Columbia close behind. The figures are drawn from surveys and can be revised later as more information filters in.

Economists say Maryland's reliance on federal contracting and other government spending, which helped the state get through the 2001 recession without much pain, is now a problem — one poised to worsen as Congress and the White House wrangle over plans to cut the budget deficit.

"The pressure on federal spending has washed over contractors in the greater Washington area and kind of frozen them in place," said Charles W. McMillion, chief economist at MBG Information Services, a Washington economic consulting firm. "So Maryland looked like it was recovering reasonably well, I would even say quite well, until last November. All of a sudden it came to a very rapid stop."

Defense contractor Lockheed Martin Corp. of Bethesda said this week that it would offer buyout packages to 6,500 employees in an effort to cut back on corporate and internal support jobs this fall. About 2,000 of the eligible employees work in the Washington area.

One bright spot: Maryland's month-over-month loss of 300 jobs in June wasn't nearly as bad as in May, when the state shed nearly 10,000 positions. The state Department of Labor, Licensing and Regulation emphasized that big difference, calling May an "outlier."

And revised figures for May aren't as bad as earlier estimates. The U.S. Department of Labor's newer figures show Maryland shedding 3,700 fewer jobs than it first estimated. That improved the state's ranking for the annual pace of job loss in May, but not by much — Maryland tied with Georgia for second-worst in May, rather than worst.

Maryland's labor secretary, Alexander M. Sanchez, said such rankings should be "taken with a grain of salt" because the statistics are frequently revised and because job creation has zigzagged in recent months.

Maryland lost about 5,000 jobs in January, gained close to 8,000 in February, lost more than 6,000 in March and — in a whiplash two months — gained about 10,000 in April and lost about 10,000 in May.

"We're looking at pretty wild swings that we haven't seen for years," Sanchez said, adding: "It is going to be an up-and-down process."

Maryland's unemployment rate remains significantly lower than the nation's, which was 9.2 percent in June. The figures are adjusted in an effort to account for normal changes in hiring and layoffs by season.

Job creation has downshifted nationwide in the last few months. Twenty-four states lost jobs in June. But Maryland was among a group of only 10 states, plus the District of Columbia, with fewer jobs in June than they had a year earlier, according to the Labor Department estimates.

Virginia — which like Maryland and D.C. is awash with federal contractors — posted one of the smallest gains over the year and saw a bigger loss in June than Maryland.

Despite the headwinds, some sectors in Maryland — most notably professional and business services — are adding jobs. That sector, which includes such professions as accountants and engineers, grew by 2,800 jobs in June and 6,500 over the past 12 months, the Labor Department estimated.

The Traffic Group, a White Marsh company that does traffic studies for developers, institutions and government agencies, is part of that trend. It hired about 20 people in the past few months and expects to add six or eight more in the next few. All are midlevel staff such as project managers and field technicians.

More homebuilders are restarting development plans that had been put into deep freeze, the company says. And budget pressures mean the federal government is looking to consolidate locations and sell properties — creating a need for traffic studies.

"2010 really was the bottom of the barrel over the last decade for us, and now we are starting to see an uptick," said Wes Guckert, chief executive of the Traffic Group. "We'll see a fairly substantial increase in revenue, we believe, for 2011."

jhopkins@baltsun.com

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