The Garden State, New Jersey’s nickname, is a leading producer of blueberries, cranberries, peaches and tomatoes as well as wines and seafood, and is home to Goya Foods and Campbell Soup. The state also has a history as a hotbed of technology and manufacturing innovation.
Albert Einstein lived and worked in Princeton, New Jersey, from the mid-1930s until his death in 1955. In addition, New Jersey is where Thomas Edison did much of his pioneering work in inventing the phonograph and the incandescent light bulb.
The state’s manufacturing sector, which remains a major economic engine for New Jersey, can trace its roots back to at least 1791, when the Society for Establishing Useful Manufactures, a quasi-government body that was spearheaded by then-U.S. Treasury Secretary Alexander Hamilton, was established to promote manufacturing businesses along the state’s Passaic River.
Today, New Jersey boasts a diversified economy that is propelled by technology, manufacturing, health care and financial-services companies. Those four sectors comprise about a third of the state’s gross domestic product (GDP).
On the manufacturing side, chemical products, food processing and computer and electronic components represent the bulk of the sector’s production. Global companies like Novartis, Honeywell, Panasonic, the Pinnacle Food Group and Unilever all have significant operations in New Jersey.
With respect to health care, a dozen of the top 20 biopharmaceutical companies in the world have headquarters or major operations in the state. Overall, nearly a half million people across some 22,000 service providers, including hospitals and research institutions, are employed in the New Jersey’s health care industry, according to the nonprofit Choose New Jersey.
Technology is another major driver of the Garden State’s economy. New Jersey is home to more than 5,000 information and technology companies, including wireless provider Verizon, according to U.S. News & World Report. The state also hosts the headquarters for three of the world’s top 100 fintech companies — IPC, Cognizant and Collabera. On the financial-services front, 12 of the Garden State’s top 75 employers operate in that sector, including Bank of America, Prudential Financial Inc. and Ernst & Young.
Despite the state’s broad economic footprint, New Jersey was stung hard by the Great Recession and still has not fully recovered from the shock. Between 2007 and 2017, the compound annual growth rate for New Jersey’s real GDP was 0.2 percent, compared with the national GDP growth rate of 1.2 percent.
The state’s anemic GDP growth is compounded by a regulatory environment and a high cost of doing business that inhibits startups and innovation, according to a 2017 study by the consulting firm McKinsey & Co. As evidence of that trend, the study points out that the Garden State has only 15 incubators and business accelerators, compared with 179 in nearby New York and 375 in California.
Home sales and prices
Home sales in New Jersey were throttled by the Great Recession, like other areas of the nation, and have only begun to rebound significantly in the past several years, according to press reports and data from the New Jersey Realtors (NJR). The median sales price for a home in the Garden State has bounced back as well, as inventories have tighten, but it still remains below pre-recession highs, according to a report by N.J. Advance Media.
Year to date through August of this year, the median sales price for a home in New Jersey stood at $316,000, according to NJR. Although that’s only a partial-year result, it is up significantly from the full-year mark in 2017 of $305,000. For 2016, according to NJR, the median sales price came in at $302,000. Home sales have been on a steady upward climb since at least 2015, when 64,744 homes sales were closed in the state. By 2017, that figure had jumped to 81,871 closed home sales, NJR data show.
Unemployment
A report prepared by Wells Fargo Securities this past June states that New Jersey’s workforce shrunk by some 43,000 workers over the prior 12 months. It also indicates that some employers may be having difficulty finding qualified workers to replace those who are retiring. McKinsey & Co. reported that average per annum employment in New Jersey from 2005 to 2015 actually shrank — down 0.1 percent.
On the bright side, the McKinsey report points out that the state has a “highly educated” workforce, with 37 percent of employees having four-year college degrees, which is a reason for companies to locate in the state. As of this past September, the Garden State’s unemployment rate stood at 4.2 percent, compared with 3.7 percent nationally and down from a recession-era high for New Jersey of 9.8 percent in late 2009.
Delinquencies and foreclosures
While the number of homes repossessed by lenders dipped to an 11-year low nationally in 2017, it reached an 11-year high in New Jersey, at 23,322. The state’s foreclosure rate stood at 1.61 percent at the end of 2017, according to Attom Data Solutions. New Jersey is a judicial foreclosure state, which means foreclosures go through the court system, and that can result in long delays before a foreclosure is finalized.
As of this past July, according to CoreLogic, New Jersey’s foreclosure rate had declined to 1.1 percent, compared with the national rate of 0.5 percent. Overall foreclosure filings have been trending downward in a seesawing fashion since the final quarter of 2014, when they spiked at 23,920. This past third quarter, foreclosure filings in New Jersey totaled 14,144, according to Attom Data Solutions.
What the locals say
“One issue here in New Jersey, because we had so many foreclosures and short sales, the people moving out of those houses weren’t buying another house, and we’re still being affected by that. … Next year will be … steadily sporadic. If it looks like the rates are going to come down some, more people will buy houses. If the rates continue to go up more, fewer people will be looking to buy. A lot of it will be driven by rates and the economy. And, hopefully, as we get through the foreclosures, we will start getting more buyers that are buying from people who are going to buy another home.”
3 Cities to Watch
Newark
The state’s largest city, with a population of some 282,000 people, Newark is located on Newark Bay and is just eight miles from Manhattan. The city boasts a major port, the Newark-Elizabeth Marine Terminal, which is the largest container-shipping operation in the New York metro area, according to Forbes. Newark also is home to National Hockey League’s New Jersey Devils; the New Jersey Performing Arts Center, one of the nation’s largest such venues; and the largest outlet mall in the state — The Outlet Collection, Jersey Gardens. Major universities located in Newark include Rutgers and the New Jersey Institute of Technology.
Trenton
The capital of New Jersey, Trenton was originally settled in the late 1600s by Quakers fleeing persecution in England. The city was the site of George Washington’s first military victory against the English during the Revolutionary War. Today, the city offers history lovers plenty of attractions to indulge their interests, including the New Jersey State Museum; the Old Barracks Museum, located on the site of the 1776 Battle of Trenton; and the War Memorial at the Capitol Complex, featuring Patriots Theater — which hosts world-class entertainment. Major private companies operating in the Trenton area include Conair Corp., the New Jersey Manufacturers Insurance Co. and construction company Jingoli-DCO.
Hoboken
A small city located just across the Hudson River from bustling Lower Manhattan, Hoboken is the birthplace of legendary crooner Frank Sinatra and the site of the first officially recorded baseball game — in 1846. The city boasts some 120 drinking establishments and a bevy of bagel shops within its 1.25-square-mile city boundaries. In addition to its rich nightlife scene, the city also features plenty of shops, restaurants as well as an array of high-rise apartment buildings that are popular with younger adults looking for more affordable housing and access to nearby big-city attractions. Among Hoboken’s famous residents are New York Giants quarterback Eli Manning, New Jersey Senator Bob Menendez and filmmaker John Sayles.
Sources: Attom Data Solutions, Choose New Jersey, CompTIA, CoreLogic, Culture Trip, Forbes, McKinsey & Co., National Association of Manufacturers, National Hockey League, New Jersey Realtors, NJ Advance Media, NJBIZ, New Jersey Department of Labor and Workforce Development, The New Yorker, The Wall Street Journal, U.S. Bureau of Labor Statistics, U.S. Department of Commerce, U.S. News & World Report, Visit New Jersey, Wells Fargo, WNYC
