Labor official: Federal cuts likely had impact on July job losses -- Gazette.Net


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Federal sequestration budget cuts likely had “some impact” on jobs declining by about 9,200 statewide in July from June, Maryland Labor Secretary Leonard Howie said on Monday.

The figures released by the federal Labor Department on Monday included a 2,400 loss in Montgomery and Frederick counties, those counties’ first month-to-month job loss since January. The public sector showed a 3,100 job loss in July, as private employers increased their overall workforce by 700.

Statewide, private jobs fell by almost 5,000 and government positions declined by 4,300. The county figures were unadjusted, while the statewide numbers were seasonally adjusted.

The July loss was the largest decline for that month in Maryland since an almost 11,000-job loss in 1991, according to federal labor figures. Montgomery and Frederick saw a 2,500 loss in July 2012.

“Federal contractors do have to monitor sequestration and adjust their budgets,” Howie said.

Normal summer employment cuts at educational institutions such as the University of Maryland system also played a part in the job reductions last month, he said. But in July 2012, the statewide decline was held to about 4,200, and in July 2011, the state gained some 8,600 jobs, according to federal figures.

Local employers cutting their work force last month included Walter Reed National Military Medical Center in Bethesda. About 2,400 civilian employees at Walter Reed, which combined into the former National Naval Medical Center in 2011, have been taking 11 unpaid furlough days since early July. Sequestration has forced billions of dollars in across-the-board cuts at federal agencies that started in March.

Those furloughs caused some reductions in the number of operating rooms and other services at the military hospital, which treats wounded soldiers. But the furloughs are ending, and services are “back to normal operations,” according to Walter Reed’s website.

Employers diversifying client base

Judy Stephenson, small business navigator for the Montgomery County Department of Economic Development, said she has not heard of any local contractors that have trimmed their work force lately.

“I’ve heard from small businesses that have been diversifying their client bases to attract more private clients so they are not as vulnerable to federal government slowdowns,” Stephenson said.

Planet Technologies, a Germantown information technology business, is among those diversifying more to the private sector. The company added some 44 employees between May 2012 and last May, Stephenson said.

Government contractor MVM of Ashburn, Va., recently warned Maryland’s labor department it may lay off 106 workers in Silver Spring and College Park by Sept. 30 because of a possible contract loss. MVM provides security services for National Oceanic Atmospheric Administration’s facilities there.

Bethesda hotel giant Marriott International is seeing some substantial reductions in its government conference and event meetings at hotels. Government-related group business is expected to decline to 2 percent of Marriott’s overall group business this year from 5 percent three years ago, Marriott CEO Arne Sorenson said in a recent conference call.

“I don’t think any of us should think it’s going to get that much better any time soon,” Sorenson said of the government business. “Maybe the only good news about how weak it is, there is not much left to give up.”

Bethesda defense giant Lockheed Martin plans to increase international business substantially to make up for any potential budget reductions on domestic programs such as the F-35 fighter jet, CEO Marillyn A. Hewson said in a conference call. “That’s where we are going to ramp up,” she said. “Over the next five years, close to 50 percent of our orders will come from international customers.”

Jobless rate rises

Maryland’s unemployment rate last month rose slightly to 7.1 percent from 7.0 percent in June. July’s rate is preliminary and could be adjusted. County jobless rates for July are due to be released Friday.

July’s statewide job loss was only the second monthly decline of 2013. Since July 2012, Maryland jobs have risen by 39,000, including almost 10,000 in health care and 8,200 in professional, scientific and technical services.

In Montgomery and Frederick, most private sectors saw increases last month, led by a rise of 1,800 in health and education services. Since July 2012, about 17,000 jobs have been added in those counties, including almost 7,000 in professional services.



kshay@gazette.net