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Maryland lost 4,000 jobs in September

Maryland employers cut 4,000 jobs in September, losses that ate into summer gains and continued the inconsistent recovery of the state's labor market.

Nearly all parts of the state's private sector reported declines, with the trade, transportation and utilities sector sustaining the heaviest cuts, shedding 4,700 positions, the U.S. Labor Department said Tuesday. Education and health services payrolls also fell by 1,900.

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The losses, coupled with a drop in the number of people in the labor force — working or seeking work, left Maryland's unemployment rate unchanged from August at 5.1 percent — the same as the national average.

But September was only the second time in the last six months that Maryland reported job declines, a sign that overall the economy is getting better, economists said.

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"Yes, it was a fairly weak report … but still if you look at the big picture, we continue to see improvements," said R. Andrew Bauer, a Baltimore-based senior regional economist for the Federal Reserve Bank of Richmond.

Some sectors added jobs, including leisure and hospitality with 2,300 jobs and the construction sector with 1,000 jobs. Government also added 2,200 positions.

Maryland was one of 27 states to report job losses last month, when the U.S. posted its second month of disappointing job gains — adding about 142,000 jobs nationally.

While job counts have passed pre-recession levels in some of the state's industries, other formerly strong sectors remain depressed.

Employment in the construction sector, for example, nosedived after the housing crash and remains down nearly 20 percent. But construction jobs have grown in recent months, which Bauer called an important, positive sign.

"It will be very interesting to see how the residential sector fares over the next year," he said. "If you start to see residential really pick up, that touches a lot of different sectors."

On the other hand, September's losses in the trade, transportation and utilities sector left businesses in that category — which includes retailers and wholesalers — with about 22,000 fewer workers than the 2007 peak, off by about 5 percent.

And while some parts of the sector are doing better than others, economists and others said the slow growth reflects fundamental changes — increasing automation in warehouses, changes to supply chains that reduce the role of middlemen, as well as lingering reluctance, particularly among government suppliers, to have large stores of inventory.

"There's not a lot of dynamic things going on. … [Firms are] doing things to improve the bottom line," said Bob Jirsa, a regional leader at McGladrey, an assurance, tax and consulting services firm soon to be known as RSM, who works with middle-market clients in consumer and industrial products. "Everyone is working to be skinnier."

Home Depot said this summer it expected to reduce positions at its distribution center in Hagerstown — perhaps by more than 300 — as it transfers some operations to Ohio and restructures the facility to handle larger online orders.

Collington Services, a distributor for Safeway, also said it expected hundreds of layoffs in Prince George's County, as it prepares to close two distribution centers in Prince George's, where more than 700 people work, moving operations to Cecil County and Pennsylvania.

The success of Amazon, which has said it has hired more than 3,000 full-time people at its Baltimore fulfillment center since opening in March — and expects to bring on "thousands" more for the holiday season — exemplifies these trends, said Anirban Basu, CEO of the Sage Policy Group.

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"It's fortunate that we have the 3,000 jobs at Amazon, but the pattern of disintermediation has also cost the state jobs," he said. "At a lot of these new facilities, you don't need a lot of people."

Basu, who chairs the Maryland Economic Development Commission, said he does not think the state's full potential economic potential can be unleashed until there is tax reform, but he said he is optimistic about the chances in 2016.

The state's overall affluence is likely to continue to buoy spending, and businesses here tend not to be as affected by fluctuations in the dollar. Several major new projects, such as a liquified natural gas export facility in Southern Maryland, are also underway, he added.

"I'm reasonably upbeat," he said. "I think Maryland's rate of growth will be roughly equal to the nation's. it may even be a bit better."

Some smaller businesses are optimistic too.

Max & Ruffy's, which produces organic dog treats and launched in 2009 in a home kitchen, may increase its workforce from five to 10 or 15 next year, after it moves to Westminster in Carroll County, where it recently signed a lease for more than 20,000 feet.

The company — which sells its own goods and produces for other brands — has benefited from trends favoring natural and organic foods, said co-owner Kelly Raiser, allowing the expansion from its current roughly 1,500-square-foot space in Rockville.

"This is a huge jump for us," Raiser said. "It's really exciting and overwhelming."

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