As the economic recovery continues to drag, collaboration among different industries and government will be key to spurring new growth in New Jersey, a panel of business leaders said today at a Newark Regional Business Partnership event.
Confidence among individual owners is starting to improve, but "collaboration is the new norm, and that's got to continue," said Nick Miceli, TD Bank's market president for central New Jersey. He pointed to the commercial real estate sector, where financial institutions and public agencies are increasingly aligning with developers and contractors to move projects along in places like Newark.
"The good and bad of that is that it certainly decreases your risk, whether you're a contractor or a developer, or whether you're a financer," Miceli said. "But it also decreases the profits as you're spreading out that risk. And I think what people have seen is that it's certainly better to keep that equipment running."
The bank executive joined other panelists at One Newark Center, only steps from the construction site for Panasonic's new North American headquarters. Miceli noted that TD Bank was a financing partner in the 12-story, $200 million project, which involved private- and public-sector partnerships and government incentives.
The panel was preceded by presentations on the national and regional economic outlook. James Orr, assistant vice president with the Federal Reserve Bank, said New Jersey is seeing a "gradual but modest recovery," as it struggles to recoup more than 200,000 jobs that were lost during the recent recession.
Philip J. London, a partner with Wiss & Co. LLP, said the accounting firm has "seen encouraging signs that businesses are getting strong," but those companies are still reluctant to make major investments. He pointed to uncertainty stemming from federal policy and overseas markets, noting that firms "don't want to make that commitment now until there's a better understanding of the fundamentals of the economy."
To stay viable in the construction industry, one of the hardest hit in recent years, smaller firms must also find ways partner with larger firms, said Marjorie Perry, CEO of MZM Construction & Management Co. In Newark, where much of the construction is union-driven, she said smaller vendors can boost their value in a project by offering services like owner representation.
Perry, whose firm is based in Newark, added that "if they're going to get to the next level, it can't be about small business practices." Namely, it's important to have strong ties with financing partners, she said, especially since the lead time for getting paid for some projects can range from 60 to 120 days.
"At the end of the day, how do you weather that storm?" said Perry, also a board member of the state Economic Development Authority. "You have to have deeper banking relationships ... let them know what's happening."