55,200 new jobs recorded in 2004

THE BALTIMORE SUN

Maryland employers added 55,200 jobs last year, the best performance since 2000 as the state accelerated out of its recessionary slow patch.

Though not as strong as the frenetic pace set in the boom years of the late 1990s - more than 70,000 jobs were created in 1999 - last year proved a big improvement over 2003.

And the local economy ended on a high note with a total of more than 2.5 million jobs in the state as private-sector hiring picked up, according to Labor Department numbers released yesterday.

"What else could you ask for?" said Anirban Basu, chief executive of Sage Policy Group, a Baltimore economic and policy consulting firm. He had expected growth of 45,000 to 50,000 jobs last year.

"That's pretty good performance for a state that already has unemployment around 4 percent and so doesn't have much slack in its labor force," he added.

Maryland wasn't as badly affected by the nationwide recession as most states, but the past few years have been slow - a total of 7,100 jobs added in 2001, 2002 and 2003 combined. Last year's growth nearly matched that of 2000, when 56,100 jobs were created.

Economists say the state is benefiting from increased federal spending, particularly in defense, along with gains in construction, financial services and transportation. Demographic-fueled growth in health care didn't hurt, either: The Johns Hopkins Hospital and Health System alone hired nearly 2,000 people last year.

"We're in the right industries, both from a federal spending perspective and a commercial perspective," said Aris Melissaratos, state secretary of business and economic development.

Maryland was adding jobs at an annual rate of 2.2 percent in December. The nation as a whole showed growth of 1.7 percent.

Hiring last year was strongest in the spring and early summer, slowing considerably afterward. But there are signs that the pace might be picking up: 3,400 jobs were added in December, the state's best monthly performance since July. That's adjusted to take seasonal variations into account.

"It shows that job growth is still gaining momentum," said John Hopkins, associate director for applied economics at RESI, the research and consulting arm of Towson University.

The state unemployment rate averaged 4 percent last year, compared to 4.5 percent in 2003.

Unemployment edged up slightly in December - to 4 percent from 3.9 percent the month before - as 1,800 more Maryland residents reported that they wanted a job but couldn't find one. The rate sometimes moves counter to the number of jobs created because the numbers come from different surveys, one of households and the other of employers.

Basu is forecasting employment growth this year of about 46,500 jobs. Others say 2005 will be better than 2004 because more sectors are improving.

"The national economy is showing signs of a full-blown recovery," said Richard P. Clinch, director of economic research for the University of Baltimore's Jacob France Institute.

Mitch Halbrich is having a hard time imagining a better employment situation. As managing director of Spherion Professional Recruiting in Baltimore, he saw companies eager to hire full-time and contract workers last year - particularly in accounting and information technology.

"It was just an incredible year," he said. "It was like this huge demand-outpacing-supply kind of scenario. ... Companies were scrambling for people."

Some of that demand was driven by businesses trying to keep up with new accounting requirements called for by the Sarbanes-Oxley Act. But many companies, seeing profits improving, stopped putting off work like computer system upgrades, he said.

"If we match last year," he said, "it'll be a wonderful world."

Businesses are optimistic, said William Burns, a spokesman for the Maryland Chamber of Commerce. "I think things are looking strong," he said.

One recent drag on jobs has come from a surprising sector: government. Local, state and federal agencies all cut jobs in the second quarter of last year in Maryland, according to the most recent industry-level data from the state Department of Labor, Licensing and Regulation. There were 6,200 fewer government jobs in those three months ending June 30 than during the same period in 2003.

"I'm not exactly sure what's going on," said Hopkins, who is tracking the trend.

Government spending remains strong, however, fueling job growth among the many contractors in Maryland. Basu expects the heightened federal spending to continue for the rest of the decade.

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