What part of Washington County's job market is surging? A chat with Fed economists

Trucks and warehouses are driving job growth in the Hagerstown area, Federal Reserve economists said this week.

From November 2020 to November 2021, the Hagerstown-Martinsburg Metropolitan Area reported a 2.4% increase in total jobs. At the same time, the area's trade, transportation and utility sector, which includes warehousing and logistics, showed a 7% increase in jobs.

The warehouse at 1115 Wesel Blvd., owned by NorthPoint Development, is occupied by Amazon. According to previous Herald-Mail Media reports, the building contains about 1 million square feet. It is one of a four warehouses in the complex in NorthPoint's Hagerstown Logistics Center on Wesel Boulevard.
The warehouse at 1115 Wesel Blvd., owned by NorthPoint Development, is occupied by Amazon. According to previous Herald-Mail Media reports, the building contains about 1 million square feet. It is one of a four warehouses in the complex in NorthPoint's Hagerstown Logistics Center on Wesel Boulevard.

"Going forward, growth (in that sector) does seem to be quite strong, especially compared to before the pandemic," said Adam Scavette, regional economist with the Federal Reserve Bank of Richmond.

Referring to the ongoing labor shortage, he said the sector is competing for workers with other businesses, such as restaurants and hotels.

"The wage increases in that industry, in particular, suggests that the demand is strong for workers," he said. "I would see (that sector) continuing the same growth that it saw in 2021."

'A huge impact'

R. Andrew Bauer, vice president and regional executive for the Baltimore branch of the Federal Reserve Bank of Richmond, said area employers referred to the growth in logistics and warehousing when Fed officials visited the area in July.

"One of the key takeaways is just how explosive that particular sector was — distribution and warehousing," he said. "One of the big challenges, in talking with people in the area, was just the labor supply. And that it was just having a huge impact, not only in that sector, but just the availability of labor everywhere."

Some businesses reported that they were struggling to meet the salaries and benefits offered by distribution centers, Bauer said.

The trend toward online shopping and delivery remains strong, Scavette and Bauer said. And many are still shying away from in-store shopping because of the pandemic.

Those trends toward trucking and warehousing have brought more new warehouses to the area.

For example, work continues on the NorthPoint Development's four-building complex on Wesel Boulevard. That complex includes a 1-million-square-foot building occupied by Amazon and a 178,000-square-foot facility used by Herbalife Nutrition.

Also, work has started to build an 825,620-square-foot warehouse at 16220 Wright Road and two warehouses totaling nearly 1.8 million square feet at the former Review and Herald Publishing Co. property near Hagerstown

Meanwhile, plans are in the works to build:

'Slightly behind the national job growth'

According to the two Fed economists, only three economic sectors in Maryland have more jobs now than they did in February 2020. Those three are trade, transportation and utilities; professional business services; and government.

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Maryland gained 4,700 jobs in December, the U.S. Department of Labor's Bureau of Labor Statistics reported Tuesday.

The bureau said Maryland's unemployment rate, adjusted for seasonal factors, fell to 5%.

That's the state's lowest unemployment rate since the beginning of the COVID-19 pandemic in early 2020.

Additional monthly state data and jobless rates for Maryland's counties and cities are scheduled to be released on Feb. 2. Those numbers are not adjusted for seasonal factors.

In looking at Tuesday's report, Scavette said December marked the sixth straight month of job increases in Maryland.

"In other words, we have seen job increases in the state for every month of 2021 except June," he said.

On average, the state added 8,300 jobs for every month during 2021, he said.

"So if we look at the pace of growth, from the trough of the coronavirus recession through December — so from April 2020 to December 2021 — the state gained 295,200 jobs for 12% growth. That's only slightly behind the national job growth over that period, which was about 14%," he said.

Maryland is about 75,400 jobs short of the total it had in February 2020, he said. That's a 2.7% shortfall.

The United States is short about 3.6 million jobs, a drop of 2.3%, he said.

Mike Lewis covers business, the economy and other issues. Follow Mike on Twitter at MiLewis.

This article originally appeared on The Herald-Mail: Fed economists say warehousing helps lead Washington County job growth