Fannie Mae economist Joseph E. Cater III was in Columbia last week, expecting to talk to local business operators about Howard County's surging job growth and minuscule unemployment rate.

What he heard was the downside of the county's good fortune: Employers are having so much trouble finding workers, it's begun to slow their businesses' growth.

"Without more workers, they [businesses] can't produce any more. So they have to limit their output" or cut back operations, he said.

The county's economic development director, Richard W. Story, is getting the same feedback, particularly from managers who want to hire more entry-level workers in retailing, the hospitality industry and other service businesses. Technology companies are scrambling too, in search of skilled employees.

There aren't statistics available to prove the point yet, but a shortage of workers is probably contributing to a slowdown in job growth in Maryland that has been apparent since May.

The latest numbers from the Bureau of Labor Statistics show that Maryland's salaried employment grew at an average annual rate of 2.2 percent during the first eight months of this year, compared with a 2.6 percent rate in the same period in 1998.

The growth rate for August alone dropped below 2 percent.

By comparison, job growth in the District and Northern Virginia has been stronger so far this year than in 1997, reflecting the D.C. rebound and Northern Virginia's success in importing workers to the region.

Job growth in the District was 0.2 percent for the 12 months ending last August, matching the annual rate for the first eight months of 1998.

Although small, the D.C. job expansion is a clear improvement over the crisis years when employment was imploding in the capital.

Northern Virginia has added jobs at a 4.4 percent annual rate through August, a faster pace than in 1998. Thanks to Northern Virginia's expansion, job growth in the Washington metro area has averaged 2.9 percent on an annual basis so far this year, ahead of last year's growth rate of 2.6 percent through August.

But the job-growth numbers for July and August may signal that a cooler economy in Maryland is slowing down the entire capital region now.

In Howard County, officials have launched strategies to cope with the scarcity of workers.

A van-pooling service has been providing transportation to Howard County jobs for residents of lower-income East Baltimore neighborhoods. A similar service is about to begin in West Baltimore.

The Howard Economic Development Authority has just finished a $100,000 radio and print advertising campaign aimed at promoting county employers, in hopes of persuading thousands of local residents to look for jobs at home rather than commuting to Montgomery County or elsewhere beyond county borders.

The authority also has created a Web site (www.howardjobs.com) where companies that pay an entry fee can list jobs and receive candidates' resumes. One company, Paragon Computer Services Inc. in Ellicott City, signed on, and in the past month got more than 100 resumes for four job openings.

But such strategies will primarily shift workers around inside Maryland, rather than add new ones, leaving the state to seek ways to keep more workers at home or entice more outsiders to enter its work force.

N. VIRGINIA IN LEAD

Job growth in Maryland is beginning to tail off

Annual job growth percent change, comparing January to August 1999 with the same period in 1998.

D.C

1998: -0.5

1999: 0.2

Metro

1998: 2.6

1999: 2.9

Maryland

1998: 2.6

1999: 2.2

Maryland suburbs

1998: 3.2

1999: 2.5

Virginia

1998: 2.4

1999: 2.4

Northern Virginia

1998: 3.6

1999: 4.4

SOURCE: Bureau of Labor Statistics