Events@Rutgers-Camden
Campus News
College of Arts and
Sciences
The Graduate School
School of Business
School of Law
University College
The Honors College
Summer
Session
Off-Site Courses
Athletics
Community Services
Computing Services
Donors
& Supporters
Faculty / Staff Services
Financial Aid
Libraries
Registrar
Student Services
Find:
People
Places
Rutgers
Web Sites
Link
to:
Newark Campus
New Brunswick
Campus
Philadelphia
South Jersey
Battleship New Jersey
Questions about
Rutgers - Camden?
©Rutgers University 2000
South Jersey on the Economic Rebound
by Mike Sepanic
Southern New Jersey will remember 2003 as a year of recovery, says a panel of prominent business executives, who also offer reason to anticipate continued growth in 2004.
During the Rutgers-Camden Quarterly Business Outlook for the final quarter of 2003, a picture emerged of a slow but sustained increase in the regional economy during the summer and through the fall.
More than 200 executives received an overview of the region's economic health during the Oct. 21 session, where none of the panelists predicted worsening conditions for the next six months, and three individuals suggested improvement. Dr. Milton Leontiades, dean of the Rutgers University School of Business at Camden,
This Rutgers-Camden School of Business event is co-sponsored by the Cherry Hill law firm of Flaster/Greenberg
The following summarizes the report of each executive.
Economic Overview
Dr. Joseph Seneca, chair of the New Jersey Council of Economic Advisors and a University Professor at the Edward J. Bloustein School of Planning and Public Policy at Rutgers-New Brunswick/Piscataway, reported on an economy that has found its legs, and is now slowly finding jobs.
Nationally, the third quarter GDP enjoyed "very, very strong" growth, with a fourth quarter predicted to be "weaker, but still likely to see real growth." Still, the recovery is in its early stages. Seneca observed that the burst bubble of tech spending sent the markets into negative territory for two straight years, only emerging into positive levels during 2003. During eight consecutive quarters of GDP growth, the nation still lost 2.7 million jobs.
Despite such apparent contradictions in the economic picture, Seneca noted that the New Jersey economy currently outpaces the nation. The Garden State enjoyed growth for 109 consecutive months during 1992 to 2001, which represents the state's longest period of peacetime growth. While the state may not experience that marathon stretch again soon, Seneca pointed to such positive indicators as continued strength in new vehicle registration and home sales and construction, adding that "housing continues to defy gravity" in terms of its market resiliency.
These and other conditions are aligned to support steady growth during the next six months, said Seneca, who concluded with the admonition that "employment is pivotal to sustain consumer confidence."
Seneca distributed a Rutgers Regional Report on New Jersey's housing industry.
Current conditions: 75
Forecast: Better
Banking
Thomas Bracken, president and CEO of Sun National Bank, opened his report with an overview of the challenges facing the banking industry, including a "stagnant economy, low interest rates, fierce competition, and overkill from the regulatory environment." On the last point, he noted that responding to increased emphasis on corporate governance issues has diverted "a lot of time and money" from the industry.
New Jersey's supply of money currently exceeds the demand for loans which, said Bracken, forces banks to put their excess liquidity into ventures with lower interest rates, thereby squeezing profit margins for the industry. "Bank are hitting the revenue wall," he said of the state's banks.
As a result, customers benefit from reduced interest rates, while the industry shifts from relationship banking to a more transactional model. New Jersey would benefit from an influx of new businesses locating in the state, and any increase in interest rates which, in turn, would increase net margins.
Banks are responding in several fashions, including relaxing loan terms, a practice Bracken dubs as "good today, but silly tomorrow." Banks also may seek to ride out the current trend, but then run the risk of drops in stock prices; some may opt to cut expenses which, notes Bracken, translates into cutting employees, an act that hurts the vitality of any bank. The best option? "Outcompete your competitors," he says.
Bracken anticipates another round of banking consolidation in New Jersey, which, if done correctly, could benefit the state.
Current conditions: 70
Forecast: Same
Retail
Richard Forman, president, CEO, and founder of Forman Mills, testified that strength in the retail sector resides largely among discounters and off-price marketers.
Low interest rates, low equity markets, and rising consumer confidence are positive factors for the retail industry, which is challenged by retirement and unemployment woes, which stifle spending. Forman shared his optimism for strong consumer spending during the holidays, although he expects that spending to take place at such places as WalMart and not the traditional retail outlets. Thrift is in among shoppers, according to Forman, who adds that this attitude has created a smarter customer who seeks better values.
Forman expressed his belief that southern New Jersey will continue to grow as a retail environment, and that such beleaguered centers as Willingboro may be the next frontier for a major retail expansion into underserved neighborhoods.
Current conditions: 75
Forecast: Better
Housing
Bruce Paparone, president of the Paparone Corporation, opened with the suggestion that real estate is likely to remain the "best investment" that is has been during the past several years.
He reported that 2003 new home sales in southern New Jersey increased 1.1% over 2002, and 2.7% over 2001. Growth primarily centers in the Atlantic County region, with some decrease in new home sales occurring in Burlington, Camden, and Gloucester counties; Burlington County posted a 22% decrease in new home sales during 2003.
The market continues to be bolstered by low interest rates. Paparone noted a small drop in sales during August, when rate rose slightly, but a return to robust activity when the rate decreased again in September. Such activity has created a "run-up in value," resulting in an average $275,000 price tag for a new home in southern New Jersey. Higher prices also are driven by erratic lumber and plywood costs due to forest fires in western Canada, and a no-growth sentiment fueled by New Jersey municipalities seeking to limit increases in their school expenses.
Paparone predicts a strong market for housing during the first half of 2004.
Current conditions: 100
Forecast: Same
Financial Services
Albert Smith, president of Canon Financial Services, offered an overview of the nationwide manufacturer financing provided by his company to clients seeking to use Canon products.
Noting that his business historically grows despite recession, Smith reported that low interest rates have helped to strength that activity. He observes the potential for a "very healthy economic comeback" with an expanding workforce. He added that New Jersey, like other states, diminished the impact of the federal tax cut stimulus through changes to state tax code.
Current conditions: 90
Forecast: Better
The next Outlook will be held on Tuesday, Jan. 6, 2004, at the Clarion Hotel and Conference Center in Cherry Hill. For more information, contact Samantha Collier.
Previous Quarterly Business Outlooks
- Summer 2003
- Spring 2003
- Winter 2003
- Fall 2002
- Summer 2002
- Spring 2002
- Winter 2002
- Fall 2001
- Summer 2001
- Spring 2001
- Winter 2001
- Fall 2000
- Summer 2000
- Spring 2000
- Fall 1999
- Summer 1999
Take the Virtual Tour
How to Contact Rutgers-Camden
Directions to Campus
Current Events at
Rutgers Camden |
 |