Survey indicates business confidence at five-year high
An indicator of businesses' outlook on the state economy reached positive territory for the first time in five years, but companies still balk at the cost of doing business here, which is holding back hiring, according to a survey released by the New Jersey Business & Industry Association at its annual public policy forum today in the Iselin section of Woodbridge.
According to the NJBIA 2013 Business Outlook survey, 17 percent of the 1,470 respondents hired additional workers in 2012, while 22 percent laid off employees this year. However, NJBIA President Philip Kirschner called that an improvement from 2011's numbers which were 15 percent and 27 percent, respectively.
"Current hiring activity, while still in negative territory, has improved steadily from hitting a 26-year low in 2009 to now being at the highest level of the past five years," Kirschner said. "Like the improving employment picture, business is picking up, business confidence is rising and businesses believe New Jersey is on the right track."
Gov. Chris Christie, who once championed the aggressive "New Jersey Comeback" that focused on key business and economic accomplishments of his administration, today struck a more somber note in his keynote address.
"I could talk about how we're growing business in New Jersey, but it's not appropriate to talk about that today," Christie said. "Everybody on the ground knows the enormous effect the storm has had on our state. Now the question is, how do we move forward?"
Whatever form the rebuilding efforts take, Christie said maintaining bipartisanship is "what will define success or failure for the state and the administration."
"What New Jersey put a cap on during the storm is what we have tried to do over the last three years, which is recognizing the needs of this state are too great to let partisan issues get in the way," he said. "If you want your businesses and your government to succeed, then you need to stand up now … so you can look back on a state that is not only building toward a huge success, but has put itself forward as a shining example of what our country needs to overcome the problems in America."
Responding to the slight uptick in hiring captured in the survey results, Assembly Speaker Sheila Y. Oliver (D-East Orange) said "our hope is we can work with the business community on initiatives that can further tick up that modest growth," and she noted the Assembly will devote its Dec. 17 voting session to a series of bills designed to promote economic growth.
While the state's business groups have stood firm against the Legislature's attempt to raise the minimum wage, a charge Oliver has led, she said she makes "no apologies for my vigilant aggression in terms of putting on the table the issue of minimum wage."
"There's not a person in this room that could survive off of the minimum wage — to have a residence, maybe support a child and put food on the table," Oliver told the state's business community at the forum today. "I absolutely have sensitivity to small businesses … but at the end of the day, I'm firmly committed to $7.25 (an hour) wage earners in this state having the opportunity to expand their lives."
Continued cost increases
While businesses are most opposed to attaching future increases to the minimum wage to inflation, Senate President Stephen M. Sweeney (D-West Deptford) said "for states that have their minimum wage tied to the CPI, nine out of 10 have better economies than us."
Still, 72 percent of survey respondents said New Jersey is equivalent or better than other states in promoting economic development, and 57 percent said the same about the state's ability to attract new business — a strong improvement from 21 percent in 2010.
But while 41 percent of the businesses polled believe New Jersey ranks at or above other states in controlling health care costs, Michael Munoz, senior vice president of AmeriHealth, said those costs will continue to rise regardless of health care reform and the creation of a state-run health care exchange.
"We're very busy as we look to 2016 at the reforms, and while we're still investing in implementing the new law, that will be coming back to payers, providers and employers over time," Munoz said during a panel of business leaders on the future of the state economy. "There's a lot of similarity between Hurricane Sandy and health care reform with all of the uncertainty surrounding both … and we've positioned ourselves to act on assumptions. But we already know there are a lot of hidden costs to insurers relating to this law … and I don't see the cost of health care getting better as the reforms are put in place."
Though the business impact of Hurricane Sandy was not measured in the survey results, as the NJBIA polled its members in September, Kirschner said "despite all of the rebuilding and the construction that we have to do, businesses are encouraged as we move down the road in 2013."
"December and January will be rough months in light of the damage from the storm … but we've seen a much improved business climate in New Jersey, and I don't think that has changed since Sandy hit," Kirschner said. "I think the improvement in the outlook survey will help the state to recover and rebuild."
Assembly Minority Leader Jon M. Bramnick (R-Westfield) echoed that thought from a business standpoint during the legislative panel, noting "you could have all the grants in the world, but if you don't feel better about what's happening in New Jersey, you're not going to rebuild."