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A new NJ Annual Report finds pessimism and doubts about 2023

As we head into the home stretch of 2022, New Jersey’s leading business organization has released its 64th annual Outlook survey, and the news isn’t good.

According to Michele Siekerka, president and CEO of the New Jersey Business and Industry Association, the survey finds a clear lack of optimism and the worst outlook since the 2009 recession.

“While some areas like sales, profits and purchases may have increased, they’re up slightly year-on-year, but these are the lowest numbers we’ve seen since pre-pandemic,” she said.

Siekerka pointed out that “70% of our business owners rate New Jersey as poor or only reasonable for business expansion, and when considering expansion, only 10% would consider expanding in New Jersey.”

Tom Merton Getty Images

Tom Merton Getty Images

The biggest problem

Siekerka said the main concern of the business community is lack of affordability.

“And our business owners believe New Jersey is lagging behind other states when it comes to business costs, healthcare costs, labor costs and taxes,” she said.

Siekerka noted, “75% of respondents said the government is not doing enough to improve their affordability, and 82% believe New Jersey is not at all or only marginally affordable.

inflation

Siekerka noted that inflation has had a significant impact on the cost of products and services across the country, even as wages continue to rise and the state’s labor shortages persist.

Another victim of the recession.

Wendelland Carolyn Getty Images

She said when you combine wage increases with Jersey’s ongoing workforce challenges, the situation becomes very difficult.

“There are workers, but they’re not the most skilled workers, so obviously we have to pay a premium, and so those labor costs keep going up.”

She said a staggering 93% of business owners or executives in the survey said they would be significantly (45%) or moderately (48%) impacted by inflation in 2022.

65% said they were significantly affected by higher fuel and material prices, 63% said they were significantly affected by higher fuel costs, and just under half (48%) said they were significantly affected by higher labor costs.

The survey found that a total of 83% of respondents were affected by supply chain issues or delays.

Despite all these challenges, she said: “Unfortunately, our policymakers continue to hit us with more and more work orders that will further add to the costs of the already high costs of doing business for our workforce.”

Siekerka also noted that “there has been no relief to date from a $1 billion unemployment insurance tax hike caused solely by the longest COVID lockdowns and shutdowns in the country, and the ANCHOR property tax relief program shut down businesses out, even though they pay nearly half the property taxes in the state.”

She said 61% of respondents said they will not keep New Jersey as their home in the future.

On the plus side

The quality of public education was seen as the most important competitive factor, with 44% rating the quality of New Jersey public schools better than other states. When it comes to protecting the environment, 28% said New Jersey was doing better than other states, up 9% from two years ago.

Another notable plus: 28% said the quality of the workforce in New Jersey is better than in other states. That’s up 7% from last year, when companies tended to hire less-skilled workers to fill vacancies.

More information on the results of the Business Outlook Survey can be found here.

David Matthau is a reporter for New Jersey 101.5. You can reach him at [email protected]

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