The New Jersey Business & Industry Association’s 56th annual business outlook survey reports a positive outlook for the state’s economy in 2015. However, the survey also reveals cautious optimism by member companies who anticipate a period of regulatory and political uncertainty, with a legislative and executive branch divided by party and an ongoing tax climate that places New Jersey behind its neighboring states.
“Our member companies predict a strong sales, profit, and employment outlook for 2015 on the heels of an excellent 2014,” said NJBIA President Michele Siekerka. “Overall our members believe the state is continuing to move in the right direction.”
Siekerka said things were looking good for small businesses in 2015. “But our members are telling us that they need to see some positive economic signals from state government early in 2015 before they fully commit to opening their wallets,” she said.
While maintaining an overall positive point of view, members also cite several challenges in the year ahead. The cost of health benefits continues to be the number one concern of New Jersey businesses, with property taxes number two and the cost of doing business close behind.
Looking toward 2015, 85 percent of those surveyed believe the cost of health insurance will continue to rise while 59 percent report the Affordable Care Act had a negative impact on their company.
Governor Chris Christie remains the most popular governor among the business sector since the business outlook survey first asked this question 23 years ago. Fifty-seven percent of those surveyed said the governor was doing a good to excellent job. Further, the governor’s ratings far outpaced those of President Obama (9 percent) and Congress (3 percent).
NJBIA members also expressed concern about the estate and inheritance taxes. For the first time the survey asked this question and 50 percent of members said that both taxes play a role in decision-making regarding the future of their business.
Other findings of the 2015 business outlook survey include:
Sales forecasts show the second highest post-recession numbers. Fifty-one percent expect the dollar value of their sales to increase against only 16 percent who expect the dollar value of their sales to decline for a net increase of 35 percent. Actual sales have increased for 46 percent of companies this year.
Members forecast strong profits with 45 percent expecting an increase against only 18 percent who expect a decline for a net increase of 27 percent. Forty percent of those surveyed said their profits increased this year.
Employers report a positive hiring outlook next year with 22 percent expecting to increase employment while 11 percent expect a reduction for a net increase of 11 percent.
Looking up: Seventy-five percent expect New Jersey’s economic conditions to either improve or stay the same in 2015.
Raising expectations: Sixty-one percent expect to give raises next year, higher than the 56 percent of companies that gave raises this year.
Spending spree: Forty-three percent anticipate spending more on purchases next year and only 17 percent expect to spend less for a net positive of 26 percent. Forty-four percent of companies spent more this year than they spent last year.
The communications and utilities industry showed the strongest forecast with a 49 point increase from last year’s survey to a net plus 38 percent.
The business outlook survey is based upon 1,046 valid responses. Most respondents were small businesses with 75 percent reporting fewer than 25 employees. For more information, visit www.njbia.org.