Economists' forecasts for Maryland vary — from better growth to worse

Maryland employers could pick up the pace of job creation to 40,000 positions this year, according to some forecasts, but one local economist expects a slowdown instead.

Moody's Analytics and Towson University's Regional Economic Studies Institute expect fairly broad-based job growth in 2014 — they're both predicting about 40,000 positions added in the state, which would be the best performance in years. Full results for 2013 aren't in yet, but Maryland employers added about 34,000 jobs in the 12 months ending in November, according to federal estimates.

The PNC Financial Services Group also expects improvement, "but not that much," said PNC economist Mekael Teshome.

"We have a durable recovery, what got us into the recession is being corrected, but the pace of growth isn't going to be that fast," he said.

Economist Anirban Basu of Sage Policy Group in Baltimore, meanwhile, thinks the job market will expand more slowly this year than last, adding 20,000 to 25,000 positions. He said he tries to err on the conservative side in his forecasts, and he's concerned that some national economic drivers won't help Maryland much.

"Among the elements that are driving the national economy are surges in energy production, industrial production and agricultural production," Basu said. "I don't expect Maryland to participate as fully in those aspects of economic growth as many other states."

What Maryland has going for it this year is a federal government poised to be less economically disruptive — no small matter for a state awash in federal employees, contractors and federally funded researchers.

Moody's Analytics economist Bradley Turner said Maryland's recovery "got waylaid" last year by federal budget cuts and Washington dysfunction. The new budget deal, which eases sequestration cuts, should mean less downward pressure by the federal government on Maryland's economy, he said.

"We expect it to be a drag, despite certain growth — like … in cybersecurity — but overall, it will be much less of one in 2014 than 2013," Turner said.

He expects that the acceleration he's forecasting for this year, helped by gains in fields ranging from scientific research to construction, will continue next year. He predicts Maryland employers will add more than 50,000 jobs in 2015.

Such growth would bring Maryland's unemployment rate, now at 6.4 percent, to about 6 percent by the end of this year and 5.2 percent by the end of 2015, he said.

That would be a substantial improvement, but it wouldn't fully heal the recession's effects. Maryland's unemployment rate was 3.3 percent at the end of 2007.

Daraius Irani, executive director of the Regional Economic Studies Institute at Towson, expects that manufacturing will continue to shed jobs in the state this year — in part, as employers continue to automate. But he thinks many other sectors will grow, from health care to tourism.

Like Turner, Irani believes the deeply battered construction industry will see improvements. It's an optimism that industry players share.

"The mood out there is bullish and positive for the first time in a long time," said Mike Henderson, president of the Baltimore metro area chapter of Associated Builders and Contractors, a trade association for commercial builders.

Construction didn't have a recession in Maryland so much as a depression, mirroring a national crash. The sector shed more than 43,000 jobs — close to a quarter of total employment — between late 2007 and 2011, according to the U.S. Department of Labor.

Now, with demand for housing on the rise again, homebuilders are picking up the pace of construction. Henderson hopes that will ease competition in the commercial sector, where some residential builders jumped after the bottom fell out of the housing market.

Irani sees Baltimore's under-construction casino and the impending work on the Prince George's County casino as bright spots for construction firms. School renovation plans in the city should also be a plus, he said.

Maryland construction firms added about 5,600 jobs in the 12 months ending in November, according to the Labor Department. That was one of the larger sector-wide gains in the state, though the big growth came elsewhere.

Professional and business services — a mainstay sector for Maryland that includes scientific research, many federal contractors and other types of service providers — added nearly 15,000 jobs in the 12 months ending in November. Education and health services expanded by more than 9,500 jobs, according to the Labor Department estimates.