Washington and its suburbs lost more than 14,000 jobs in the 12 months ended November 1990, the most dramatic decline since the recession of the early 1980s. But while private industry and the federal government contracted, local and state governments expanded their payrolls, according to a report released yesterday to area officials.

The Metropolitan Washington Council of Governments, as part of a gloomy assessment of the economic health of this region, reported that there were 10,400 more people working in local and state government jobs in the District and its suburbs in November 1990 than there were a year earlier.

That finding -- which caught local government officials by surprise -- actually could be just another manifestation of the area's economic downturn, said Robert E. Griffiths, director of information resources for the regional organization. He said that government work may have become more appealing because of declining opportunities elsewhere.

"Public sector employment became much more attractive," he said, noting that a real estate agent or an architectural engineer without private work now might consider a government job. Griffiths also suggested that officials running departments in area counties and states foresaw hiring freezes and rushed to fill vacancies.

Both Maryland and Virginia imposed hiring freezes last fall, and some local governments, such as Prince George's County, have started to lay off workers.

Those actions are not reflected in the numbers released yesterday.

The report, based on information supplied by the D.C. Department of Employment Services, includes all public sector workers, both full time and part time, as well as teachers.

According to the report, the District saw an increase of 1,700 workers, to 57,200 in November 1990. Comparable data showed an increase of 3,100 state and local jobs in the Maryland suburbs for the 12 months ending September 1990, and an increase of 4,700 jobs for the same period in the Virginia suburbs.

Officials in some counties questioned the report's hypothesis that government work has become more attractive.

"We have always been competitive with the private sector," said William Mitchell, chief of the Montgomery County Employment Division. While some jobs, such as nursing positions, are hard to fill, the county has not had trouble attracting workers, he said.

He added that dramatic increases in the county's student enrollments led to the hiring of more teachers.

Other officials said that local governments are doing more because of increases in the region's population and because they now offer services once provided by the federal government.

According to the report, the biggest job loss occurred in the construction industry, a drop of 17,600 jobs in one year.

The federal government saw a drop of 4,400 jobs, which Griffiths attributed to a winding down in the U.S. Census.

One of the more troubling aspects of the report, Griffiths said, was a flattening out in service jobs -- an increase of just 1,200. He noted that in the mid-1980s, there was an addition of 30,000 to 40,000 service jobs each month.

"Your report is very troubling . . . and there is no prescription for the future," said D.C. Council member Jim Nathanson (D-Ward 3), who was elected chairman of COG yesterday.

Griffiths noted that there have been worse times in the Washington area. He said that during the 1981-82 recession, Washington lost 24,300 jobs. He said the area recovered, adding 655,000 jobs between 1982 and 1990.

Also released yesterday was a report showing that new commercial construction in the Washington region declined during the third quarter of 1990 by 193,000 square feet.

Montgomery led the area in construction, with nearly 1.1 million square feet underway, followed by the District, Prince George's and Fairfax.

Montgomery's development includes construction of a massive parking garage at the site of the future Glenmont Metro subway station.