Coming off the state’s strongest year for job creation since 2005, many Maryland employers are cautiously optimistic they can build on that trend this year.
But this year’s presidential election might have a significant impact, some say.
“I think an election year is always a challenge since people are uneasy because they don’t know if they’ll be getting a new president,” said David Dumm, store manager at Wolf Furniture in Frederick. He expects hiring at his 30-employee store to remain flat in 2012, as it did in 2011.
“I don’t think people are confident in the economy right now,” Dumm said.
Others are seeing enough new sales and contracts to require more hires this year.
Recovery Point, a Gaithersburg disaster recovery company, has added about 25 percent more employees in three years, growing to about 90, said Dick Fordham, director of corporate strategy. Recovery Point is still hiring in information technology among other areas, he said.
The number of people hired this year will be based on contracts the company obtains — and Fordham said he’s optimisitc, even in the current budget-cutting climate.
“If it goes as we hope, we could increase our work force by another 25 percent in the next few years,” he said.
Despite positive momentum in many areas, numerous businesses, especially small ones, are struggling. William C. Dunkelberg, chief economist for the National Federation of Independent Business, said in a statement that small companies nationwide lost ground slightly on the employment front in December.
“The good news is that the number of owners cutting jobs has normalized,” Dunkelberg said. “In the past several months, reports of those cutting workers have been at the lowest levels since the recession started in December 2007. ... At least it appears that plans to hire are trending in a positive direction.”
Initial claims for unemployment in Maryland have fallen in recent months. New claims in the state for the week ending Jan. 7 were down by 20 percent from the same week last year, according to state labor department figures. The $19 million in benefits paid that week declined by 6 percent from the same week a year ago.
Slow, steady growth expected in most sectors
Maryland businesses and agencies added about 27,000 jobs from last January to November, according to federal figures. That was the most in that time period since 2005.
Daraius Irani, director of the Regional Economic Studies Institute’s applied economics and human services group at Towson University, forecasts nonfarm job growth in Maryland of 1.1 percent in 2012 and 1.4 percent in 2013, slightly higher than the rise in 2011.
Nationally, total nonfarm payroll employment increased by 1.64 million last year, or 1.3 percent, including a boost of 200,000 in December. That was the biggest increase since 2006, although the Great Recession left employers with a lot of ground to make up.
Nationally, employers have lost 5 million jobs — or 3.6 percent — since late 2006. Maryland has fared better than the nation with a job loss of 60,000, or 2.3 percent, since 2006.
The Economic Advisory Committee of the American Bankers Association, which includes economists from some of the largest banks operating in Maryland, such as Bank of America and PNC, forecasts the national economy adding 1.6 million more payroll jobs this year.
Last year was characterized by slow and steady growth in most sectors, said Sally Sternbach, executive director of Rockville Economic Development Inc.
“The expectation for 2012 is the same with potential acceleration,” Sternbach said.
While there is an overall optimism among many executives, she cautioned that the international monetary situation and potential federal budget cuts could dampen that sentiment.
Upon her recent visit to 21 Rockville incubator companies, most were hoping for new hires, Sternbach said. With more Rockville biotechs launching Phase 3 trials of their candidates, Sternbach said she expects to see that sector strengthening this year.
MedImmune of Gaithersburg, the global biologics division of AstraZeneca of the U.K. and Maryland's largest biotech, is adding 100 employees to its manufacturing plant in Frederick, Max Donley, executive vice president of human resources, said in an email. The biotech hired 460 people in Maryland in 2011, mostly to fill scientific and technical positiions in Montgomery and Frederick counties.
"Additionally, our participation in the state’s economic investment program enabled us to expand our administrative, scientific and production capabilities," Donley said.
The real estate crisis is hurting employees’ ability to relocate for employment, providing an added challenge in attracting scientific and technical talent, he said.
“They simply cannot afford to sell their current home in this economy due to the huge loss of home value that most Americans have experienced,” Donley said.
Temp-help employers often serve as a bellwether for permanent hiring trends. Temporary help employment nationally for December was 4.4 percent higher than a year ago, according to federal figures.
“Staffing firms added about 100,000 new jobs to the economy in 2011,” Richard Wahlquist, president and CEO of the American Staffing Association, said in a statement. “And indicators remain positive for the year ahead.”
Wanda Smith, president and CEO of Symphony Placements, a Timonium staffing services firm, said her company had a strong finish in 2011 and expects that to continue this year. Gross sales finished up 20 percent, while profits continued to grow over 2010 despite the continuation of high state tax assessments for unemployment, she said.
“Indications from the decrease in the unemployment [rate] figures strongly suggest our industry will continue to grow,” Smith said.
Last year, staffing firms faced challenges in finding qualified individuals who were actually serious about finding a job, she said. Many did not want to jeopardize their unemployment benefits.
“As the unemployment figures fall, this will continue to be a strong challenge,” Smith said.
Clients are particularly using temp-to-permanent hires to fill new openings, as well as to cover for long-term vacancies due to illness, she said.
Flatness in hotels
Hotels might add few if any jobs this year, said Steve Merchant, general manager of Springhill Suites in Annapolis. Although the hotel hired 10 people in 2011, most were replacements.
Even with room rates rising again — federal employees’ rates, which fell last year, are increasing — Merchant said it has not boosted revenues and room sales enough to justify more staff.
“I have a small staff, and it doesn’t fluctuate too much,” he said. “But I haven’t really laid off anyone in the last couple years.”
Six Flags America in Laurel said it plans to hire 2,000 workers for the 2012 season, about the same as last year.
Wegmans, the Rochester, N.Y., grocer, added two stores in Frederick and Bel Air last year, bringing its total in the state to four, including its Hunt Valley and Landover locations. The new stores boasted 1,000 employees between them, said Jo Natale, spokeswoman for Wegmans.
The chain expects to add two more stores, in Columbia and Crofton, in 2012, with a net of 1,100 jobs, Natale said. This will include both part- and full-time positions. Another store is planned in Germantown in 2013.
“We’re looking for people who want positions in which they can offer excellent service to customers. We can teach people the grocery business, but the passion for the great service comes from within,” Columbia store manager Wendy Webster said in a statement.
Gardiners Furniture, with five stores in Westminster and the Baltimore area, is still waiting to see if home sales pick up to the point where people will look for new sofas and dining room sets, said Mark Iwanowski, who works operations. The business has 253 employees in its stores and warehouse.
Job growth was stagnant in 2011, with Gardiners adding two positions to address scheduling needs, but business was steady, he said. The influx of residents relocated through the Pentagon’s base realignment program also helped.
“All signs are there for economic recovery, but people aren’t spending to the point where they used to,” Iwanowski said. “We used to not be able to keep furniture within the building. Now we might have it here for two weeks.”
Military contractors also are expecting a flat year for jobs. That will depend largely on how proposed federal budget cuts shake out, Bruce Tanner, CFO of Bethesda military and aerospace giant Lockheed Martin, said in a recent conference call.
“We expect sales at the top line to be flattish compared to 2011,” Tanner said.
Lockheed has been making work force reductions through buyouts and job cuts. The company had about 9,000 employees in Maryland as of late 2011, about 200 fewer than a year earlier, according to state figures. The information systems division could even have a slight decline in sales in 2012 in the “mid-single-digit [percentage] range as the government IT market continues to face budget pressure,” Tanner said.
Health care outlook: Continued growth
Southern Maryland Hospital in Clinton anticipates job growth on par with the 350-plus employees it brought on last year, said Paul Zeller, vice president of human resources. The hospital employs about 1,800 people and is looking to ramp up its cardiac services, he said.
The hospital is the only designated stroke center in Southern Maryland, and many of the added employees were to support the hospital’s cardiac work, Zeller said.
“We obviously have to be cautious. Growth has to fit our strategy and has to be coming from where there’s growth in the marketplace,” Zeller said. “We’re being cautious from the point of view that there’s signs of things getting better, but you still have to be careful.”
Advertised positions continue to draw a “tremendous” pipeline of candidates, he said.
Villa Rosa, a nursing facility in Mitchellville, also is trying to stay atop market demand for certified medication aides, said Neva Babcock, administrator and registered nurse. The nursing home hired about 50 people, including nurses and geriatric nursing assistants, in 2011.
While Babcock anticipates no change in Villa Rosa’s hiring this year, the financial penalties imposed on hospitals that receive patients returning within 30 days of their discharge is sparking the need for more skilled-nursing facilities to handle these patients, she said. But the area also suffers from a lack of qualified employees for these positions, Babcock said.
Many accounting and consulting firms anticipate increased hiring this year as new tax and corporate laws take effect.
"The difficult economy and greater scrutiny of accounting practices have increased demand for our accounting and tax services," Peter Ryan, a founder and partner of Ryan & Wetmore, said in a statement. The firm has offices in Silver Spring, Frederick and Vienna, Va., and has added several new accountants in the past three months to fill demand.
Several Maryland banks continue to hire, though the pace has slowed for some. EagleBank of Bethesda added more than 100 employees between June 2010 and last June, but that rapid pace will likely not continue this year, said Ronald D. Paul, chairman and CEO.
“We are continuing to grow, but do not believe it will be at such a rapid pace,” Paul said. “As we expand into Northern Virginia, we will continue to grow.”
kshay@gazette.net