Maryland employers added 6,100 jobs in February, one of the largest monthly gains in a year, but with gains split almost evenly between the public and private sectors, the growth underscores the task the state faces as it works to make itself less reliant on government jobs.
The increases, reported Friday by the U.S. Department of Labor, helped keep the state’s unemployment rate steady at 5.5 percent, matching the national average, as more people entered the labor force.
Government added 3,000 jobs, largely at the state and local levels, last month. In the private sector, the strongest growth came from the professional and business services category — an area that includes government contractors — which added 3,000 jobs. Businesses in the construction, and leisure and hospitality sectors reported declines.
The new figures also adjusted January’s statewide gain to 300 jobs, 200 fewer than originally estimated.
Steven Cochrane, managing director of Moody’s Analytics, said the improvement in the national economic picture is starting to boost Maryland’s economy, but its historic reliance on government spending means it will likely continue to lag behind other areas.
“It’s fair to say that the Maryland economy will look better in 2015 than in 2014. It’s hard to say that Maryland is going to catch up with the U.S.,” he said. “We have to get used to the idea that the Virginia-Maryland-D.C. area might be a laggard for a while, until other drivers get in there.”
Richard Clinch, a locally based research economist at the Battelle Memorial Institute, said the fact that hiring in government helped drive February’s gains is “a little worrisome.”
“Maryland’s got a tough row to hoe,” he said. “We’ve got to diversify our economy away from this reliance on the federal government. We’ve got to do that by taking advantage of our assets … and all those are supported by government spending,” such as health care and education.
The Rosedale-based engineering consulting firm Accurate Infrastructure Data Inc. grew from 18 to 23 people over the past 12 months as it secured work as a subcontractor for engineering firms working on government and military contracts, said John Berrettini, a vice president there. The firm also sustained the business driven by private developers, but he remains wary.
“We’re still very cautious,” Berrettini said. “We’re still not certain about the future due to the overriding issues with government debt and how that will be dealt with. … If government spending has to be cut back drastically, certainly some of our government-financed work could dry up.”
The construction sector — often considered an indicator of widening economic growth — contracted by 1,500 jobs in February, the second month in a row of declines.
Clinch said the numbers were surprising, given anecdotal evidence of building activity.
“I’m a little just wondering what’s going on there,” he said, saying the cold weather and other factors might complicate the estimates.
Maryland was one of 36 states to report employment gains in February. Since February 2014, the state has added 46,000 jobs.
Anirban Basu, CEO of Sage Policy Group Inc., said the year-over-year numbers may be overly positive, shaped by weather and other factors.
But Basu, who served on Gov. Larry Hogan’s transition team and was appointed to chair the Maryland Economic Development Commission, said he is encouraged by the hiring in the business service sector, which indicates that traditional contractors have begun to shift their work away from reliance on government.
“This is about the U.S. economy, this is about weather, and this is about some businesses successfully transitioning from government contract-only business to a better blend,” he said.
The Baltimore metropolitan area added about 2,500 jobs in February, according to the Labor Department report.
The renewed hiring appears to be encouraging more people to enter the labor pool. The state’s labor force grew by more than 6,600 people in February.
A spokeswoman for Baltimore-based money manager T. Rowe Price Group said the firm has more than 250 job openings globally, most of which are in the Baltimore area. The firm, which increased its global head count by 3.6 percent last year, employed roughly 4,320 of its 5,870 workers in the Baltimore area at the end of last year.
FirstPic Inc., a project management consultant based in Gambrills, is in the midst of the biggest hiring spree in the small business’ 15-year-history, thanks in part to a government contract it landed last year with the U.S. Department of Housing and Urban Development, said Mark Piccirilli, company president and founder.
The company, which had 30 employees four months ago, expects to increase to about 40 workers, the biggest jump to date for a company that has experienced mostly slow, steady growth, he said.
Despite an improving economy, qualified applicants appear plentiful, Piccirilli said.
“That remains a very competitive process,” he said, noting that more than 100 resumes have come in for just a handful of jobs. “We’ve found some strong resumes and talented people. … There’s no shortage of professional candidates in this area.”