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©Rutgers University 2000
South Jersey Economy Holding On
by Mike Sepanic
Not the worst of times, not the best of times, and things will get better unless they don’t.
Such was the mixed message delivered by six leading area business leaders during the mid-year session of the Rutgers-Camden South Jersey Business Outlook on July 17. More than 200 executives attended to receive a first-hand overview of the region’s economic health and its likely future.
On average, the business leaders rated current economic conditions as 71 (out of 100), with optimism for improvement during the coming six months. Dr. Milton Leontiades, dean of the Rutgers University School of Business at Camden, moderated the panel.
This Rutgers-Camden School of Business event is co-sponsored by the Cherry Hill law firm of Flaster/Greenberg and the Chamber of Commerce of Southern New Jersey
The following summarizes the report of each executive.
Economic Overview
Dr. Joel Naroff, chief economist
for Commerce Bank,
observed that "we’re in the midst of a massive retrenchment in a
restricted number of industries." Adding that this phenomenon seems
centered in the manufacturing and high-tech centers, Naroff noted that
consumers continue to buy "at a good pace," and that housing
and auto sales remain solid. He predicts that the "cutting-back process
is largely over with," suggesting that much of the necessary adjustments
have been made. Regionally, housing starts and employment growth have
slowed but continue to advance. New Jersey, a latecomer to the economic
boom, seems to be holding its own during the slowdown. "The state
has maintained the pace a little better than the nation," noted Naroff,
who offered that "by the end of the year, everything should come
together."
Current conditions: 65
Forecast: Better
Agriculture
Peter Furey, executive director
of the New Jersey Farm Bureau, opened with his observation that "everybody
quietly cheers for farmers to do well and for farmland to remain open."
Defining his industry as "prolific providers of raw commodity material,"
Furey reported on the difficult challenge of operating farms without the
benefit of economies of scale. He suggested that the state’s farms need
to identify and move toward niche markets, such as servicing corn ethanol
manufacturing which would offer greater reimbursement to farmers for their
corn. "We’re eternal optimists," he concluded.
Current conditions: 75
Forecast: Same
Defense
David Grzyb, vice president of
Lockheed
Martin Corporate Naval Electronics and Surveillance Systems, reported
that the defense industry is in good health. In the Delaware Valley, Boeing,
CSC, L3 and Lockheed employ approximately 16,000, reflecting an approximate
increase of 5% over the previous year. The same defense manufacturers
anticipate a 5 to 8% growth in their southern New Jersey facilities. Acknowledging
that "defense always is subject to Congressional vagaries,"
Grzyb noted that most South Jersey-related defense projects are receiving
favorable reactions in federal committees.
Current conditions: 85
Forecast: Same
Gaming
Michael Pollock, publisher of
the Gaming
Industry Observer, spoke of the possibility of a slight decline for
Atlantic City’s casinos, the industry’s first in its 23-year history.
Pollock suggested that the decline in year-to-year revenue during the
first half of 2001 may not correct itself by the close of the year. He
cited higher gas prices and the lack of new attractions as prime forces
in this matter. Casinos are responding by emphasizing slot machines over
gaming tables. "Overall, casinos are becoming more efficient and
less labor intensive," he said. Weaker properties are suffering,
which contradicts the long-standing belief that Atlantic City’s individual
casinos rise and fall together. While bullish on the longer-term picture,
Pollock expressed a "decidedly neutral" outlook for the balance
of the year.
Current conditions: 50
Forecast: Same
Health Care
Mark Baiada, president of Bayada
Nurses, delivered a "cautiously optimistic" report for the
health care sector despite a severe nursing shortage. Delivery costs,
disabled clients, and an aging population all are on the rise, while consumer
pricing remains stable, thereby creating challenges in the industry. Pharmaceutical,
liability, and utilization costs also are increasing. Baiada noted that
the physical and emotional demands of nursing may contribute to the lack
of new nurses entering the profession.
Current conditions: 75
Forecast: Better
Port Authority
John Maier, assistant executive
director of the South Jersey Port Authority, spoke of decreases in imports
and overall port activity. While scrap metal exports – a mainstay of the
port – is down, fresh fruit imports remain strong, with DelMonte leading
the way. Plywood trade remains level from last year, which helps the port
to remain the East Coast’s largest mover of this commodity. Maier expressed
his belief that the deepening of the Delaware River channel will help
to alleviate difficulties raised by the current shallow nature of the
river. As of the Outlook, more than 1,400 vessels made use of the river
during 2001. Maier noted that the Delaware River Port Authority will invest
$750 million to improve the weather and navigation system from Cape May
northward.
Current conditions: 75
Forecast: Same
The next Outlook will be held Tuesday, October 16, at the Regency Palace in Mount Laurel. To register, contact the Chamber of Commerce of Southern New Jersey here
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