NJ Employers Lost Confidence in NJ Economy Before the Attacks of Sept. 11

“The terror attacks battered an economy that had already fallen to its knees,” NJBIA President Joe Gonzalez said in a Trenton news conference. “The low levels of business confidence uncovered by our survey clearly are grounded in disappointing business conditions that predated the attacks."
Collectively, the 1,600 companies participating in the Association's 43rd annual survey reported a glum outlook for sales, profits and employment in 2002, their optimism for the first half of the year falling to the lowest levels in at least eight years. The outlook for sales has fallen to second lowest level in 18 years. “A newfound pessimism has replaced last year’s durable optimism,” Gonzalez said. “One year ago, a majority of New Jersey employers had every reason to believe that the prosperous 1990s would extend into the first year of the new millennium. Unfortunately, their hopes have been dashed on the ground of an altogether different reality.”
Pessimism about future economic conditions is similar to the levels of pessimism found in the Association’s 1990 outlook survey, which was conducted at the start of that recession. The low levels of business confidence found in the current survey also bear comparison to the surveys of the early 1990s, when New Jersey was emerging slowly from the last recession.
NJBIA Executive Vice President Philip Kirschner, in presenting the policy findings of the survey, said employers are most troubled by fast-rising healthcare costs and by a property tax burden that is already the nation's highest.
"In the face of falling sales and severe price constraints, many employers are struggling just to meet their weekly payroll expenses," Kirschner said. "The message from our members to New Jersey's newly elected government leaders is exceptionally clear: lower the cost of health insurance and stabilize property taxes."
Following are some of the primary survey findings:
The business community's outlook for the state and national economies, as well as for their own industries, had softened somewhat last year but remained at optimistic levels. This year's outlook is gloomy by comparison.
Employers' current pessimism is grounded in the reality of disappointing business conditions in 2001.
Turning now to the outlook of individual companies for their sales and employment in the year ahead.
One of the most significant themes in NJBIA's 2001 outlook survey was an intensifying shortage of skilled labor that was hampering the ability of companies to expand their businesses. Eight years of steady economic expansion had ushered in what arguably had become the most acute labor shortage in 30 years. As the number of unemployed has risen in the current economic downturn, the labor markets have weakened, easing this pressure somewhat.
With sales and profits in decline, employers are also being squeezed by their inability to raise prices.
Finally, employers identified the rising cost of providing healthcare benefits to their employees as the biggest problem they face, followed by the cost of property taxes. When asked what should be the top priority for state government leaders, 40% said "cut healthcare costs," followed by another 13% who said "stabilize property taxes."
The results of NJBIA's 2002 Business Outlook Survey, which was conducted in mid-September, are based on responses from the first 1,600 member companies or 9 percent of the Association's 17,000 member companies, an exceptional rate of return. The respondents represent every industry and county in the state. The vast majority of respondents were small companies employing fewer than 50 people. NJBIA, with 17,000 New Jersey employers as members, is the nation's largest state-level employer association. For more information, contact Chris Biddle at 609-393-7707, ext. 227.
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Author: New Jersey Business and Industry Association
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