ANNAPOLIS — ANNAPOLIS -- Maryland's economy is still suffering acutely from severe losses in construction, defense spending and manufacturing, but area business executives say that the long-awaited recovery is finally clearly in sight. In a gloomy assessment of Maryland's economy, Mark Wasserman, secretary of the state's Department of Economic and Employment Development, told legislators yesterday that he had come with "a somber message." "A state that had been considered to be relatively recession-proof now looks in some respects is as if we had ripped a scar off the face of the economy and revealed the weaknesses underneath," he said. Mr. Wasserman told the House of Delegates Committee on Economic Affairs that the state will take a long time to recover from troubles in the manufacturing and defense sectors. And "a two-year overhang in office and commercial space suggests there is little prospect of an upturn," in the construction and development sectors he said, noting that employment in construction alone is down 27 percent since the 1980s peak. But in an unusual role reversal, area business executives were much more optimistic than the normally upbeat state official. A survey of nearly 700 Baltimore- and Washington-area corporate financial officers released yesterday indicated that Maryland companies are seeing sales rebound and plan to step up hiring soon. Michael A. Conte, a University of Baltimore economist who directs the survey, said that continuing layoffs, such as those announced Monday by Leedmark and USAir Group, show that the state is still mired in a recession -- but not for long. Based on the rising corporate profits and expectations reflected in the latest survey, Dr. Conte said he believes the downturn "will end in Maryland by the end of the year." Dr. Conte said it was the first time in the 18 months he has been sending out semiannual questionnaires that Baltimore's executives have responded with optimism. "Usually, it has been Washington that has been doing OK, and Baltimore is down in the pits," he said. "But now we are seeing Baltimore doing OK. . . . This is really exciting." Washington is still doing better than Baltimore, though, he said. In the survey by the university's Regional Economic Studies Program, Baltimore-area executives reported: * Employment was half a percent higher this summer than it was last summer, and should rise another 1 percent by the end of the year. The biggest job growth is expected in finance, insurance, real estate and retail trade. * After a dismal first quarter, corporate revenues jumped more than 8 percent in the second quarter, and are expected to rise another 4 percent in the last half of 1993, meaning that companies will see an improvement even after inflation is subtracted. The survey was not entirely rosy, though. The executives indicated that Baltimore's economy will continue to be held back by reliance on shrinking government contracts. Dr. Conte found that one-third of the surveyed Baltimore-area companies rely on government contracts. And almost all of them, including civilian contractors, expect their revenues to decline. Nearly half of the Washington-area businesses rely on government contracts, but only defense contractors said they expected their revenues to shrink.