Hiring forecast calls for job drought

Daily Record, The (Baltimore), Dec 16, 2003 by Kara Kridler

Despite signs that the economy is improving, Baltimore-area employers are more bearish this year than last about hiring new staff, according to a survey set to be released today.

Only19 percent of Baltimore-area companies polled plan to hire additional employees during the first three months of 2004, staffing company Manpower Inc. found. By contrast, 33 percent of companies expected employment to increase during the first quarter of 2003.

A year ago at this time, employers forecast a brighter outlook, Manpower spokesperson Jeff Locker said in a prepared statement.

The 19 percent also marks a significant decline from the 34 percent projecting growth for the forth quarter of this year.

John Hopkins, associate director for applied economics at Towson University's RESI, an economic research initiative, called the results surprising.

The most recent unemployment numbers were lower than expected and showed that the job market is sustaining. The results of the survey do not show this, he said. I expected that moving into 2004 that some of the momentum in the job market would be sustained in this survey.

The Bureau of Labor Statistics data for the Baltimore region indicate year-over-year growth has been continuous, Hopkins said.

Each month from January until October has seen gains, and the expectation is that the momentum will keep up - this is the same in Maryland, Hopkins said.

Hopkins noted that, according to the bureau's research, Maryland saw a decline last March, but every other month showed year-to-year gains. Maryland enjoyed a year-over-year gain of 8,700 new jobs in October, the most recent month for which data are available.

Richard Clinch, director of economic research for The Jacob France Institute at the University of Baltimore, also characterized the findings as unexpected.

Overall, I would have expected a higher degree of optimism for Baltimore and Maryland, Clinch said. I think the economic fundamentals have improved over the year. Clearly Baltimore and Maryland have outperformed the nation, so I am surprised.

For the most part, the state's economy avoided the recession, Clinch added. Maryland's unemployment rate is below 5 percent - these numbers do not show this.

Clinch still has a positive outlook for 2004.

Contrary to the Manpower survey numbers, I think you will see continued growth in the state and probably stronger growth than we have seen, Clinch said.

Maryland's numbers mirror those for the entire country. Nationally, 20 percent of companies polled plan to increase hiring.

Based on the survey, the region is expected to perform as the same level as the nation, Hopkins said. My prediction is that the region should outperform [the nation's economy] based on the past year's job market activity.

He added, While I would be concerned with the results, I would not place full credence on them. I still remain optimistic going into 2004 that the Baltimore region and Maryland hiring will pick up.

The Manpower Employment Outlook Survey is performed quarterly to measure employers' intentions to increase or decrease the number of employers in their companies. It is based on polls conducted with about 16,000 public and private companies in 470 markets throughout the U.S. Fifty-four companies in Maryland responded to the most recent survey.