By Raymund Lee Flandez
BALTIMORE – Maryland’s economic and labor departments released figures Tuesday showing the state’s construction industry may be enjoying a rebound – good news for the state’s lagging economy.
Construction companies surveyed report they expect a fourth-quarter turnaround and anticipate hiring more than 1,000 workers overall.
Because the construction industry is usually a leading indicator, Maryland economic experts are optimistic about the state’s business prospects.
“The construction sector truly was one of the hardest hit,” said Pradeep Ganguly, chief economist for the state Department of Business and Economic Development. “But we expect that this sector will lead the recovery in the second half of 2002.”
The construction sector lost a net of 877 jobs from December to May but is expected to add a net of 1,116 jobs, according to the 629 firms responding. High business costs and a construction labor shortage were major factors in the industry’s contraction.
But a change is imminent. The effects of the national recession are beginning to wear off, state officials said.
According to the statewide survey, special trade contractors, such as plumbers, electricians and roofers, are likely to provide the majority of the anticipated new jobs, with 819 by December. Bridge and road construction will add another 285 positions. But building construction is not expected to add workers.
“We hired eight new people so far this summer in anticipation of the fall,” said Matthew Helminiak, manager of Carroll Insulation Co., which is training these employees in anticipation of more business in the approaching cold months.
Seasonal changes, low interest rates and an expanded market share through companies consolidating propelled the new hires.
Since the latter half of last year, job growth in construction slipped to a new low of about a 6 percent job loss in May. Statewide, about 161,000 workers are involved in construction.
The Baltimore and Washington areas accounted for most of the losses, 490 and 411 respectively, the companies reported. Southern Maryland, however, gained 58 positions, mostly through federal contracts.
The survey, conducted by DBED and the Department of Labor, Licensing and Regulation in May, asked participating construction companies not to include jobs lost or gained through seasonal turnovers from the period six months before June. It also asked them to predict new hires for the six months following.
This fall, Washington-area companies are expected to hire 604 people and Baltimore-area companies 355. The rest of the state will only see small construction job gains.
“The direction it tells me is that it was sliding,” Ganguly said. “It had difficult times. But the next six months looks promising.”
Although the national economy has showed signs of a “moderate” recovery, the state still is slowing markedly because its recession started a little later than other states, Ganguly said.
With the construction industry touted as one of the first sectors in the state to recover, he said, the promising figures could also mean an upswing in the state’s economy.