2019 | News

Montgomery’s Job Growth Trails Northern Virginia, D.C.

New report says increase was lowest in eight years

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Stephen S. Fuller Institute

Job growth in Montgomery and Frederick counties was significantly slow in 2018 compared to other areas in the Washington region, according to a new report.

“This is part of a bigger economic story and has to do with what type of development is there. The mix of jobs in Montgomery and Frederick don’t lend themselves to any sort of accelerating pattern in growth,” said Jeanette Chapman, deputy director of the Stephen S. Fuller Institute, an Arlington, Virginia economic research think tank.

The two counties added 4,700 jobs, according to the report based on federal Bureau of Labor Statistics data. Earlier predictions said 9,800 jobs would be created.

The report found that more than 35,000 jobs were created throughout the Washington region in 2018, about 16,000 less than expected.

Chapman said that although the entire region experienced slower job growth, suburban Maryland has been lagging for the past five years in the wake of the Great Recession, while Northern Virginia and the District of Columbia have been growing twice as fast.

To better grow the economy, Chapman said Montgomery County needs “clusters” of highly valued jobs in the private sector.

“If the jobs in your area are primarily serving restaurants, hospitals, leisure and those kinds of jobs, those tend not to be large enough to grow the economic beyond the resident base,” she said.

In the Maryland suburbs, construction and retail sectors both lost jobs, according to the report.

Because the federal government, which has a large presence in the county, is no longer expanding, Chapman said Montgomery and similar jurisdictions will need to turn increasingly to the private sector.

Montgomery County’s bid for one of Amazon’s two new headquarters, while unsuccessful, will still yield benefits, because the location was one of 20 finalists, which will help the county gain name recognition, Chapman said.

She also believes that Amazon’s presence in Northern Virginia will have a “spill off effect,” by bringing more workers to the county who make the commute.

The Fuller Institute’s report is the latest in a series of studies by outside economic experts that have been critical of Montgomery County’s economic development strategies.

In January, an analysis by the Baltimore-based consulting firm Sage Policy Group, urged county leaders to grow the tax base in order to compete with neighboring jurisdictions in Virginia.

The Montgomery County Economic Development Corp., a public-private partnership, has embarked on a more aggressive recruitment strategy for attracting top-level information technology companies. CEO David Petr is in Austin, Texas this week at the annual South by Southwest conference geared toward investors that focuses on trends in film, technology and music. Petr could not be reached for comment.

Chapman said the county has the right approach in seeking to attract more outside companies because it shows that they have “flexibility to change” when it comes to the economy.

She also said that the county will also need to increase its stock of affordable housing, an issue also facing neighboring jurisdictions.

“If there’s no new supply generally, there can’t be new population increases,” she said.

Dan Schere can be reached at Daniel.schere@bethesdamagazine.com