Maine’s job outlook grim for 2012 class, economists warn

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The jobs outlook for many of Maine’s 2012 college graduates has only slightly improved since last year, and hiring prospects remain grim for those who wish to stay within the state, despite modest economic growth and waning unemployment, some experts say.

The forecast comes against a backdrop of the conflicting factors that weigh into employers’ decisions to hire those who have recently graduated.

On Friday, the United States Department of Commerce reported that the economy has enjoyed some of its most robust growth in more than a year and a half. It announced that the nation’s economic output grew at an annualized rate of 2.8 percent in the fourth quarter, stemming last summer’s fears of a second recession, and for now, instilling a sense of security in the still feeble recovery.

Similarly, the Federal Reserve said Jan. 25 that the economy is expected to grow at a rate of 3.2 percent next year and up to 4 percent in 2014.

However, the Fed also solidified plans to stimulate borrowing and keep short-term interest rates near zero until late 2014, an indication that the weak housing market, scarce employment and the  European debt crisis still threaten a lethargic American recovery.

Such realities loom large over Maine and play an integral part in local employers’ decisions to take a chance by hiring graduates, according to University of Maine economist James McConnon.

“It’s a lot better this year than it was last. Employment, gross domestic product and income have all picked up a bit,” McConnon said, “but in terms of launching high growth rates or witnessing the kind of growth the economy needs right now, we’re nowhere near where we need to be.”

In Maine, the unemployment rate remained at 7 percent in December, according to the Maine Department of Labor. The number of unemployed totaled 48,700, down 3,800 from a year ago.

At the same time, the national unemployment rate was 8.5 percent, down from 9.4 percent a year ago.

“Businesses in general are in pretty good shape in terms of profitability,” McConnon said. “So there’s room for optimism in thinking that 2012 will be a better year for job seekers.”

McConnon said an increase in consumer spending both across Maine and the nation has helped employers’ bottom lines, something he said makes for a rosier outlook for graduates seeking work.

However, he noted employers are still cautious, which could erect barriers for many graduates looking to start their careers.

“I can’t tell you that engineering or retail or any specific markets are better or worse off,” he said. “But I can tell you that even though consumer spending, savings accounts and GDP are improving, they’re not improving at the rates we need to regain the jobs we lost during the recession.”

The Maine Department of Labor’s employment outlook report — which projected trends over the 10-year period from 2008 to 2018 — forecasts job opportunities in Maine will be concentrated in service-providing industries, education, health services, professional and business services, and the hospitality and leisure industries.

Last week, Merrill Huhtala, manager of the Occupational Employment Statistics Program at the MDOL, said job openings for graduates in Maine will remain relatively scarce within the next few years.

For instance, according to the outlook report, job openings for those graduating with a bachelor’s degree in Maine are predicted to remain around 1,884 per year until 2018, “which is not a lot when you consider how many students graduate with a bachelor’s degree in the state each year,” Huhtala said.

By comparison, the University of Maine System, responsible for overseeing the state’s seven public colleges and universities, awarded 5,815 degrees in the 2010-2011 academic year, of which 2,541 were bachelor’s degrees, according to its annual report.

Huhtala added that job prospects, in this sense, do not depend on a student’s level of education. Instead, the MDOL tracks the number of jobs expected to open in the state that will require a specific degree.

For instance, he said students in the “highest level of the educational pyramid,” such as those with advanced degrees, should expect a 5.4 percent growth rate, or about 242 job openings in Maine each year until 2018.

In September, the National Association of Colleges and Employers conducted a survey that pointed to “cautious hiring plans for the college class of 2012.”

Overall, it found that employers who took part in the survey expected to hire 9.5 percent more graduates in 2012 than they hired in 2011.

“In general many employers say they are focusing on replacement hires — individuals who are being brought in to fill the positions of exiting employees,” said Marilyn Mackes, the NACE executive director, in a statement released with the survey.

McConnon added that reduced spending on the local, state and federal levels, in addition to large public sector layoffs and the European debt crisis, will combine to threaten the nascent recovery and restrain any spur in hiring.

“But we’re seeing slight improvements and glimmers of optimism,” he said.

This entry was posted on Monday, January 30th, 2012, 1:53 am. You can follow any responses to this article through the RSS feed.