The New Jersey Business & Industry Association (NJBIA) recently published the results of its annual Business Outlook Survey. On a positive note, New Jersey businesses are projecting increased performance on a number of fronts, including employment, sales, and profits. At the same time, worries remain about the state’s economy and the cost of doing business in New Jersey. The prospect of a $15 minimum wage topped the list of specific concerns cited by the respondents.
“New Jersey’s economy is strong. Businesses overall are continuing to see steady economic growth,” said NJBIA President and CEO Michele Siekerka. “We are seeing guarded optimism as to whether these trends will continue in 2018. That sense of caution is resulting from the uncertainty about policy changes that a new governor and administration generally tends to bring. Of continued concern, this year is the more familiar challenge of the overall high cost of doing business in New Jersey versus other states.”
In total, 1,010 NJBIA members responded to the survey. Most respondents were small businesses, with 68 percent reporting fewer than 25 employees and 11 percent with 25 to 49 employees.
Many NJ Businesses Optimistic for 2018
Most businesses expect 2018 to be better than 2017. Below are several key findings of the Business Outlook Survey:
Fifty-eight percent expected sales in 2018 would rise and only 9 percent said sales would fall. The net positive of +49 percent is notably higher than last year’s forecast of +38 percent.
Fifty-one percent said actual sales were up in 2017, compared to 24 percent who said sales were down. The net positive of +27 percent is considerably higher than last year’s 12 percent net increase.
Fifty-five percent forecasted that profits will increase in 2018, compared to 12 percent who expect profits to fall. The net positive of +43 percent is higher than last year’s forecast of +31 percent.
Thirty-one percent of members said they would increase hiring in 2018, while 6 percent said they would decrease employment for a net positive of +25 percent. Last year, a net positive of +20 percent forecasted increased employment.
Sixty-nine percent said they would provide wage increases in 2018. 60 percent will give raises ranging from 1 to 4.9 percent. In 2017, 67 percent gave wage increases – the same percentage as in 2016.
Forty-nine percent said they would increase the dollar value of their purchases, while 10 percent expect the dollar value of their purchases to go down for a net positive of +39 percent. This is higher than last year’s forecasted net positive of +27 percent.
Concerns Raised by NJ Business Community
Many of the top challenges raised by New Jersey businesses are familiar. As in the past, NJBIA members listed health insurance costs as their most significant concern. Overall, 30 percent cited it as their top concern (up from 24 and 25 percent in the past two years), while 72 percent rated it as one of their top four concerns.
Many businesses also continue to be troubled by the state’s high property taxes. In total, 25 percent reported it as their top concern, and 65 percent listed it among their top four concerns. Meanwhile, the overall cost of doing business in New Jersey was cited by 18 percent as their top concern, and 68 percent included it among their top four concerns.
The majority of business owners believe that New Jersey is not competitive with other states in several key categories, including taxes, fees, and controlling healthcare costs. In addition, only 24 percent of members believe that New Jersey had made progress in easing regulatory burdens over the last year. In light of these perceptions, it is not entirely surprising that while 43 percent of New Jersey businesses surveyed indicated that they are planning to expand, only one-third plan to expand and would open another location in New Jersey. Meanwhile, two-thirds plan to expand in another state.
Minimum Wage Increase Worries
Minimum wage hikes also ranked high on NJBIA members’ list of concerns entering 2018. The survey revealed that more than 60 percent of the responding businesses would be impacted by an increase in the state’s hourly wage. To offset higher wages, most would make cuts in other areas. Specifically, 30 percent of businesses said they would raise prices to offset the wage increase, 29 percent would reduce staff levels, and 27 percent would reduce hours. Just 11 percent would respond with greater automation.
A Whistleblower Just Filed a Complaint Against Your Company: Here's What to Do Now
Few situations create more uncertainty than learning that an employee has filed a whistleblower complaint. Questions arise immediately: Is the allegation legitimate? Should the employee be placed on leave? Do we need to notify our insurance carrier? Are we now prevented from disciplining the employee if there are unrelated ongoing work related issues? There is […]
Assignment for the Benefit of Creditors: An Alternative to Bankruptcy for Distressed Businesses
When a business reaches the point where it can no longer service its debts or otherwise resolve its liabilities, management is often faced with a difficult question: is a bankruptcy filing necessary or is there another way to perform an orderly liquidation or sale of the business assets? While Chapters 7 and 11 of the […]
Breaking Down New Jersey’s “Mansion” Tax: What Buyers and Sellers Need to Know
For many years, the New Jersey Mansion Tax has been a significant consideration in high-value real estate transactions. Recent legislative changes, however, have substantially altered how the tax operates, including who is responsible for paying it and the amount owed in certain transactions. Whether you are purchasing, selling, or investing in New Jersey real estate, […]
Estate Planning for Digital Assets Under New Jersey Law
As our personal and financial lives increasingly move online, estate planning must evolve to address a new category of property: digital assets. From email accounts and social media profiles to cryptocurrency and cloud-stored business records, these assets often carry both financial and sentimental value. Yet, without proper planning, they can become inaccessible—or even lost—upon incapacity […]
The Role of Representation and Warranty Insurance in M&A Transactions
In today’s mergers and acquisitions market, representation and warranty (R&W) insurance has become a common feature of deal negotiations. Once used primarily in larger transactions, R&W insurance is now frequently incorporated into middle-market deals as buyers and sellers look for efficient ways to allocate risk and close deals. When structured properly, R&W insurance can help […]
You Just Received a Federal Grand Jury Subpoena in New Jersey: Now What?
Receiving a federal grand jury subpoena is not something most businesses or individuals anticipate. While it can be concerning, a federal grand jury subpoena does not necessarily mean that you are being accused of wrongdoing. It does, however, mean that a federal criminal investigation is underway and that federal prosecutors believe you may possess information […]
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!
