After more than four years of recovery from the recession, New Jersey bankers see an economy that is clearly better but by no means robust and they expect these “fair to good” conditions to continue, according to a new economic survey of its members by the New Jersey Bankers Association.
"There is a general sense that the economy has gotten better, but certainly 'boom' times have not yet returned," according to the survey, which was conducted by James Hughes, dean of the Bloustein School of Planning and Public Policy at Rutgers. Hughes discussed the survey results Friday at the school in New Brunswick.
The survey found loan demand improving, but a majority of the bankers rated loan demand as only 'fair.' Commercial real estate loan demand was also rated as modest, with only multifamily rental real estate getting a strong rating. One in five respondents rated multifamily real estate demand as "excellent."
Demand for office space, strip mall and big box retail got a low score from the bankers.
But a brighter note was struck by the residential real estate market. The bankers expressed a generally favorable assessment of residential loan demand and are optimistic for that demand over the next six months.
The bankers are not expecting much change in property values during that time period.
Within the generally cautious mood there was a note of stability that bodes well:
"In general, the portfolio of negative indicators—the number of customer bankruptcy filings, customer foreclosures, and 'past dues' for residential mortgage payments in the past months—has shown a steady improvement from past surveys," according to the report. The bankers said the impact of Sandy on banks and their customers has diminished in all areas.
Hughes noted that after losing nearly 5 million jobs in 2009, the U.S. has created about 2.3 million jobs a year for the past three years. "That is not both-guns-blazing economic growth, but it is a pretty decent rate," Hughes said. "And I think that is reflected in the survey: that the economy has been settling into a new post-recession normal, and that we are in a period of modest economic growth that appears sustainable going forward."
Hughes said the survey indicated that "There is nothing on the horizon that is going to cause us to get a burst of growth or anything that's going to derail the expansion."
Hughes said New Jersey employment has grown steadily since the loss of more than 100,000 jobs in 2009, and 2013 saw a gain of 69,000 jobs, although Hughes said that figure is likely to be revised when more complete data are released in March.
"One of the key themes that came out of the survey is that conditions are improving but full economic lift off has not yet arrived," Hughes said. When asked to rate various aspect of the economy, the bankers handed out very few "excellent" ratings, he said:
"Fair to good ratings predominated---heavily learning toward fair."
This article has been updated with additional reporting from the event.
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