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Bankers: Economy weakening under Murphy

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In contrast to the view of Gov. Murphy's impact on the New Jersey economy, respondents saw the U.S. economy improving under the policies of President Trump.
In contrast to the view of Gov. Murphy's impact on the New Jersey economy, respondents saw the U.S. economy improving under the policies of President Trump. - ()

A majority of the state's local bankers say New Jersey's economy would worsen under policies proposed by Gov. Phil Murphy.

In New Jersey Bankers Association’s annual survey on the economy, almost 69 percent of respondents expect the state economy to weaken or decline if proposals are enacted such as a “millionaires tax” and raising the sales tax back to 7 percent.

NJBA surveyed bankers from 92 local banks in its membership. The survey was conducted with Rutgers University’s Bloustein School of Planning and Public Policy.

Despite the negative view of the Murphy administration, a majority of the bankers said the state’s economy is currently strong. Nearly 42 percent of respondents rated the state’s current economy as “good,” compared to just 15 percent in 2016. A record 10 percent of respondents rated the state’s economy as “excellent.”

Some 75 percent of the respondents saw the U.S. economy improving under the policies of President Trump, almost as many said those same policies will hurt New Jersey’s economy – most notably this year’s federal tax reforms that limit property-tax deductions.

Other survey highlights include:

  • Increasing demand in the business loan market from 2011 to 2018, with 49 percent indicating that current demand for business loans is “good.”
  • Almost 60 percent of respondents rated the current demand for real estate loans as “good.” This increase takes place as the “fair” rating continues to decline.
  • Multifamily rental submarket remains the strongest, followed by industrial warehousing, with “pick-and-pack” fulfillment centers, a new category for 2018, coming in as the third strongest submarket.
  • The largest obstacle to business lending is regulatory concerns (30 percent), followed by a lack of qualified borrowers (24 percent) and lack of demand (21 percent). The perceived lack of demand and lack of qualified borrowers as obstacles has waned, however, from five years ago.

“The macro context of the current survey suggests that there should be a strong sense that the national economy has continued to advance in a sustainable, not-excessive fashion, and that this advancement should extend into the short-term future,” the survey found. “Perhaps it is best described as a “Goldilocks Economy” – not too hot, not too cold – just right. Therefore, it is assumed that the current level of activity in many national economic subsectors will also probably advance going forward.”

The full survey results can be found here.

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Vince Calio

Vince Calio


Vince Calio covers health care and manufacturing for NJBIZ. You can contact him at vcalio@njbiz.com.

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