By Donald C. Fry
The economic recovery has, technically, been underway since June 2009 – the date when experts say the Great Recession officially ended. But recently-released employment data tend to reinforce perceptions, in terms of job creation, that this recovery is off to a choppy start.
Data from the U.S. Department of Labor, the state’s Comptroller’s office and Manpower, Inc.’s quarterly employment outlook survey all paint similar pictures of the recovery in Maryland.
From a jobs standpoint, Maryland bottomed out in February 2010, when non-farm payroll employment fell to fewer than 2.5 million – 145,000 jobs less than two years earlier, when payroll employment peaked in our state.
Since the February 2010 bottom, Maryland’s non-farm payroll job count showed gains for three consecutive months. But it has receded somewhat since then, decreasing in seven of the eight months between May 2010 and January 2011, the most recent month for which federal jobs statistics are available.
For Maryland, the preliminary January 2011 employment data from the federal Bureau of Labor Statistics brought both good news and bad news. The good news is that Maryland’s unemployment rate dropped to 7.2 percent in January – the 12th lowest in the U.S. Less encouraging is that Maryland’s payroll employment decreased by 7,100 jobs from December 2010 to January 2011. In terms of raw numbers, only four states – South Carolina, Florida, New Jersey and Georgia – experienced greater one-month employment erosions.
But year-to-year from January 2010 to January 2011, total employment in Maryland increased by 4,600 jobs, a 0.2 percent gain, according to federal data. That ranks Maryland fifth among seven Mid-Atlantic states, tied with North Carolina for percentage job growth between January 2010 and January 2011. Pennsylvania (+1.3 percent), West Virginia (+1.2 percent), Delaware (+1.0 percent) and Virginia (+0.8 percent) experienced greater percentage job growth than Maryland.
Industry sectors in Maryland that experienced employment increases were trade, transportation and utilities; professional and business services, leisure and hospitality, and education and health services.
Jobs decreased in Maryland’s construction, manufacturing, and financial business sectors.
The Maryland Comptroller’s Office recently noted that our state’s economic recovery appeared to slow toward the end of 2010. As a result, the Board of Revenue Estimates recently decided not to make any upward revisions to its projections for state government revenue growth in the current fiscal year and in FY 2012.
Maryland’s economy “continues to show signs of recovery,” the board reported in its March 9 letter to the governor that predicted a “slow but steady acceleration” for Maryland’s economy. But the board stuck to its December forecast, projecting a 3.3 percent growth in general fund revenue for FY 2012, which begins on July 1.
The $13.6 billion in general fund revenue forecast for FY 2012 is approximately the same as in FY 2008 before the recession. But the fund’s projected 3.3 percent revenue growth for FY 2012 amounts to only about half the fund’s average annual growth generated by Maryland’s economy between 2000 and 2008.
Meanwhile, recent employment outlook surveys by Manpower, Inc. suggest that Maryland employers are expecting job statistics to gradually improve. Manpower survey results issued on March 8 report that 18 percent of the state’s employers expect to increase staff levels in the second quarter – up from 15 percent in the first quarter.
This is encouraging, but it is nowhere near the 27 and 30 percent of employers reporting plans to expand their hiring in the pre-recession years of 2006 and 2007.
Though statistics from numerous sources show an uneven recovery for Maryland in terms of job growth, it’s fair to conclude that a recovery is under way, but that it is slow and gradual.
Employment data inherently vacillates over time, so it’s not appropriate, for instance, to get overly excited about short-term fluctuations, such Maryland’s employment decline in January. But it is well worth noting the longer-term chronic sluggishness of this recovery when it comes to job creation in our state.
It should remind our elected leaders in Annapolis that creating a competitive business environment that generates jobs and economic growth must remain their absolute top public policy priority.