BERLIN, N.H. — Erik Guilbeault of Berlin could be the symbol for Berlin’s economic despair and its prospects for revival.

A lifelong resident, 30-year-old Guilbeault had worked at Isaacson Steel for 11 years when he was laid off in February. A welder by trade, Guilbeault was on the brink of leaving his wife and two children to go on the road seeking work when he was hired recently to be warehouse supervisor at the new federal prison that begins housing inmates this month.

He said he has not negotiated his pay yet, but at a range of $21-$25 an hour, he’ll be making more than he did at Isaacson. And his wife was among the first hires at the prison, leaving Androscoggin Hospital to work in medical records at the prison for a ‘‘big-time’’ salary boost.

Berlin, a once-thriving mill city, appears to be on a path out of its steep economic woes, with residents and officials pinning hope on the federal prison’s annual $20 million payroll and a biomass plant that promises to resuscitate the logging industry when it opens late next year.

But lifelong residents temper hope with caution, and the manager of the local employment security office is bracing for one of the toughest winters yet.

‘‘It’s baby steps, but the federal prison opening is bringing in a whole lot of families and they want to buy [houses].’

‘‘We talk about all the hope, but this is scary right now,’’ said Mark Belanger, manager of the Berlin office of the state Department of Employment Security. ‘‘It’s a very flat job market.’’

Berlin continues to be in a state of flux. Job losses this year outpace new hires. Isaacson Steel and Car Freshner both shut local plants this spring, putting about 200 people out of work.

‘‘Every year we seem to lose something,’’ said Diana Nelson, the department’s employer services representative in Berlin and a member of the city council. ‘‘We keep saying ‘What more can we lose? It has to be over.’’’

Berlin’s unemployment rate stands at 9.4 percent compared with 5.4 percent statewide. Its population of 9,000 is half what it was in 1960. Schools and churches have shut down and vacant storefronts dot downtown.

Nelson, who has been at the Berlin office for 13 years, can recall the boom years when the mills and other employers ‘‘were willing to take anyone with a heartbeat.’’

‘‘Now it’s way reversed,’’ she said. ‘‘Everyone’s fighting for every job.’’

Belanger received 300 applications for a dozen positions open at the recently revived Gorham Paper and Tissue Mill. ‘‘That’s how many people are dying to work there,’’ he said.

But there are some strong signs Berlin is about to turn the corner.

The prison as of last week had 100 of its anticipated 341 employees in place and will take in its first group of minimum-security inmates by month’s end. Spokeswoman Pamala Tharp says the prison is hiring aggressively, with an emphasis on hiring the balance of the employees locally.

The Jericho Mountain State Park in West Berlin, with 75 miles of all-terrain vehicle trails, is luring summer tourists. Its annual festival in late July drew about 2,000 people.

Parallax Partners, developers based in Maine, announced plans last week to build a Hampton Inn on a vacant block in the city’s downtown. The city currently has no hotel. ATV and snowmobiling enthusiasts stay in neighboring Gorham, city officials said.

The $275 million biomass power plant has created about 250 construction jobs and is expected to employ 30 to 40 workers when it opens.

Belanger said he thinks the biomass plant could have the largest ripple effect on the region by creating a need to log and haul wood to burn.

‘‘Everything we lost with the paper industry has the opportunity to come back,’’ Belanger said.

The 1,280-bed federal prison, high on a hillside and hidden from most sightlines by trees, was completed in 2010, but Congress did not allocate funds to operate it until last year.

Prison officials held a job fair last month that drew 76 applicants. Nelson said that was a strong turnout given the credit and background checks required by prison officials.

Tharp said the facility is on schedule to take in about 128 minimum-security inmates this month. The 1,152 medium-security inmates will arrive when the prison is fully staffed.

Because the US system sets a mandatory retirement age of 57 for corrections officers, no one above age 37 is being hired for those positions, which has generated grumbling. The median age in Berlin is 45, and two-thirds of the population is older than 35, according to 2010 census statistics.

Belanger and Nelson emphasize the ripple effects prison employees will have on the local economy — buying or renting homes, eating in restaurants, shopping, buying cars. They say there is already a demand for more services.

RE/MAX realtor Steve Grone said the influx of federal employees ‘‘is definitely giving us renewed hope.’’

‘‘It’s baby steps, but the federal prison opening is bringing in a whole lot of families and they want to buy,’’ he said.