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NJBIA survey finds 13 percent of companies plan layoffs, 15 percent expect to hire

BY TOM HESTER SR.

NEWJERSEYNEWSROOM.COM

For a fourth consecutive year, more New Jersey companies reported a decline in their sales, profits, spending and employment than reported an increase, according to the New Jersey Business & Industry Association’s 2012 Business Outlook Survey released Tuesday.

Nearly twice as many companies reported making layoffs as reported hiring additional workers in 2011, leaving the survey’s current-employment indicator at a negative level for a fourth consecutive year.

And the 2012 outlook for employment is barely positive, with 15 percent planning to expand employment, 13 percent planning to make employment cuts, and 71 percent of businesses planning to keep employment stable. The net proportion of companies planning to expand employment is just 2 percent.

As for the national economy, business confidence has fallen sharply, declining to the lowest level of the past 20 years for the survey. The percentage of respondents saying US economic conditions will worsen in the first six months of 2012 is three times higher than the percentage saying conditions will improve, leaving this indicator at -29 percent.

In New Jersey, 33 percent expect conditions to worsen, but 20 percent expect conditions to improve for the state in the first half of 2012, leaving a net negative of -13 percent. This is slightly improved from last year’s outlook.

The outlook for companies’ own industries has deteriorated. 23 percent expect conditions in their industries to improve over the next six months, but 32 percent expect them to deteriorate. This leaves a net outlook for companies’ own industries of -9 percent, the lowest level of the past three years.

The NJBIA is the Trenton-based lobbying arm for New Jersey small businesses.

The survey also found that businesses are feeling more positive about their state government leaders and the state’s business climate.

New Jersey businesses saw a second year of improved sales, profits, spending and employment in 2011, moving the state one more step away from the recession bottom recorded in 2009.

The survey revealed what NJBIA forecasters see as a moderately improved outlook overall for sales, profits and spending in 2012. However, the outlook remains weak and at low levels for an economic recovery.

“New Jersey is making progress towards a full recovery, but we aren’t there yet,” said NJBIA President Philip Kirschner, who presented the survey findings at a Trenton news conference. “There is some improvement, but many businesses continue to struggle, and they are understandably reluctant to hire.”

The survey, while finding that business conditions are making slow improvement in New Jersey, also found that business activity remained at low levels in 2011.

54 percent said New Jersey is fair or average as a place for business expansion, 28 percent said it is poor, and 18 percent said it is a good place in which to build or expand facilities, up from 9 percent in the 2010 survey, ending 10 years of declining ratings in that regard.

The dark outlook comes as Gov. Chris Christie attempts to bolster the state’s economy as one of the key platforms of his administration. And despite the outlook, late in the second year of his term, the governor gets high marks from the New Jersey business community, with 74 percent saying he is doing a good-to-excellent job, unchanged from last year. No other governor in the past 20 years has received such high marks two years running.

While polls have shown the public has little faith in the Legislature, ratings by the business community improved for a second consecutive year, with 28 percent saying lawmakers are doing a good-to-excellent job, up from 15 percent last year and 5 percent in 2009.