Local Job Growth May Fade

And 54 percent of employers this year projected expansion for 2009, compared with 63 percent who expected to grow this year.

Managers "are bracing for a rough year," said Angelo Kostopoulos, president of Akron, a District-based data research firm that conducted the employer study for the Human Resource Association of the National Capital Area. "They are cutting costs and trying to be wise and prudent about how they're spending their money." Since the survey was conducted, he said, employers have expressed more apprehension about hiring.

Paul Villella, president and chief executive of the HireStrategy recruiting firm in Reston, said employers interviewing candidates are dragging out the process much longer, waiting to see whether the economy will show any signs of improvement. Traditionally, firms do most of their hiring in the first few months of the year, but they now "are saying this is contingent on what January and February look like."

"In the trenches, what people sense is that the first half of the year will be challenging," Villella added. "In quarter one, [in job growth] we could go upside down."

The conventional wisdom is that the Washington region is shielded from the type of job cuts seen elsewhere in the nation because of the federal government and contracting sector, which represent 32 percent of the area's $370 billion economy. The Houston and Dallas regions have benefited from growth in the oil industry, and metropolitan Boston has been helped by a thriving technology sector.

Economic benefits of the federal government presence abound in Virginia, where employment reached its highest level on record in June and its second-highest level in October. The unemployment rate is 3.2 percent in Northern Virginia, one point below the state's rate. It was 2.7 percent in Arlington County, which had the lowest rate in the state.

Like other parts of the country, the region's unemployment rate reflects the collapse of the housing market, the crisis in the banking industry and the plunge in consumer spending.

About 3,200 people in the financial services sector and 600 in retail lost their jobs over the past year. Another 2,400 positions in information technology and 700 in manufacturing were cut. Moreover, about 5,000 people in the construction sector are newly unemployed.

"Everybody's affected -- architects, developers, general contactors, subcontractors, suppliers -- even people who provide us help with the IT system," said Don Owen, president of P & P Contractors, a Rockville-based drywall subcontractor for commercial developers.

Owen said that he has let go "a significant number" of laborers, and added, "We really feel bad for the craftsmen, tradespeople and project managers really getting hit hard."

Cara Carter said she was laid off from her job as a human resources specialist at a District-based contracting firm earlier this month. She said contracting work simply dried up.

"A company thought they needed our services but decided not to award the contract to anyone. They canceled the project," Carter said. "The number of proposals we were asked to respond to declined, as well as some proposals being held back, because the company didn't want to pursue the project any longer."

Still, Carter expressed optimism that she would land on her feet in the Washington area economy. She said she has three strong job prospects.