South Jersey on the Economic Rebound
by Mike Sepanic
To a person, the business leaders participating in the first Rutgers-Camden Business Outlook for 2004 offered the promise of increasing economic improvement throughout the year.
Their enthusiasm was well suited to the occasion: more than 300 executives attended the Jan. 6 session, which marked the tenth anniversary of the Outlook, which premiered in January 1994.
That first session was held in a conference room on the lower level of the Rutgers-Camden Campus Center, with only 20 attendees. Ten years later, the event is held at an off-campus conference facility in order to accommodate its ever-growing audience.
“We launched the Outlook in order to provide an economic barometer of South Jersey’s current and future conditions,” explains Rutgers-Camden business dean Milton Leontiades, event founder and moderator. “Statewide economic reports tend to homogenize New Jersey’s regions, but that lack of differentiation fails to provide a clear view of South Jersey’s economy. Rutgers-Camden has helped to address that discrepancy.”
The panel included members of the original Outlook. Throughout the session, participants offered their own thoughts on the occasion. “Milt Leontiades has become a fixture of the South Jersey marketplace,” said Brian Ford, who thanked Leontiades and Rutgers-Camden for contributions to the region. Doris Damm recalled the very first panel, and remarked on the sustained growth of public interest in the event.
This Rutgers-Camden School of Business event is co-sponsored by the Cherry Hill law firm of Flaster/Greenberg and the Chamber of Commerce Southern New Jersey.
The following summarizes the report of each executive.
Economic Overview
John McCormac, treasurer of the State
of New Jersey, offered a forecast of economic growth for the Garden
State.
During 2003, 41,200 new jobs were added to the state in such sectors as service, leisure/hospitality, non-state government, and financial services. This expansion stands in contrast to New Jersey’s neighboring states (Pennsylvania, Connecticut, and New York), which experienced job loss during the past year. McCormac reported that New Jersey is fourth in the nation in terms of economic recovery, with unemployment “hovering below 6%” and a 13% growth in new businesses during 2003. Such indicators as a strong real estate market and increased new vehicle registrations suggest that the growth will continue into 2004.
McCormac credited New Jersey’s investment in attracting and growing businesses as a key factor in this success. He also noted that school construction will continue in the new year, after spending almost $1 billion on such projects with New Jersey companies in 2003. He anticipates that the state will spend approximately $2.5 billion in road programs in 2004.
Targeted investments such as the Camden Recovery Act have helped boost regional and statewide economies. “Today’s activity in Camden was unfathomable two years ago,” he said. “The $175 million in the Camden Recovery Act already has produced billions of dollars of investment in southern New Jersey.”
Current conditions: 65
Forecast: Better
Ports
Joseph Balzano, executive director and CEO of the South
Jersey Port Corporation, reported that Camden’s ports moved
three million tons of cargo in 2003, an amount that he expects to increase
during the new year.
“Some ports are container ports, but Camden works with bulk cargo, and that produces jobs,” he said. “The Delaware River is a great highway to world.”
Some companies, such as Del Monte, are taking full advantage of that aquatic highway. Balzano said that Del Monte ships 500,000 tons of produce each year. A new $25 million port facility is being constructed to allow St. Lawrence Cement to receive one million tons of concrete slag from Italy. A new 75,000-square-foot Del Monte facility is expected to be completed this year.
Balzano expects steel cargo to return to Camden as a result of the lowering of the federal steel tariff. He anticipates “great success” for the ports in 2004.
Current conditions: 85
Forecast: Better
Temporary Staffing
Doris Damm, president and CEO of ACCU
Staffing Services, testified that increased economic activity is producing
greater demand for skilled temporary workers in a wide array of fields.
The sector witnessed increased demand for production line manufacturing skills, product supervisors, and plant managers during the fourth quarter of 2003. Demand for service sector employees experienced slow improvement.
Damm noted that employers are seeking such support staff as systems analysts, computer support, marketing sales supervisors, registered nurses, food processors, receptionists/clerks, and administrative managers. She expects a strong temporary staffing industry in 2004.
Current conditions: 80
Forecast: Better
Manufacturing
Brian Ford, area director for retail, distribution and
manufacturing at Ernst & Young, observed
that “after 20 years, we’re seeing the first real increase
in various productivity indexes following manufacturing cycles.”
Recently, such an index registered at 62.8%; anything greater than 50%
indicates an economic expansion.
Ford cited these figures as “a real positive sign, as manufacturing has always lagged behind the economic recovery,” but seems to be keeping pace with growth during the current cycle.
He reported that the consolidations of the past decade have helped the sector, which now faces pressure from the flow of investment to manufacturers in China. Taxation and the inability to secure qualified workers are other challenges that confront the industry.
Ford predicts that 2004 will be the strongest year for manufacturing in 15 years.
Current conditions: 60
Forecast: Same
Distribution
Charles Kramer, president of Kramer
Beverage Company, opened with a historical perspective on distribution
in southern New Jersey when he noted that “30 years ago, there were
12 beer wholesalers in the six South Jersey counties. Today, there are
three wholesalers.”
Noting that such consolidation exemplifies major distribution trends across the nation, he reported that the buying power of major chains is “squeezing margins for wholesalers” who, in turn, will need to continuously upgrade technology in order to gain new efficiencies.
Kramer reported that his particular industry, beverage distribution, is entering a good phase with the entry of “echo boomers” (children of baby boomers) into legal drinking age. Low-carb beers, flavored malt beverages, and energy drinks currently are popular products, while spirits are offering increasing competition to beer among the 21-to-28 year olds.
Current conditions: 75
Forecast: Better
Consumer Products
Gerald Shreiber, president of J&J
Snack Foods Corporation, was unable to attend, but provided his prediction
of growth during the first half of 2004.
Current conditions: 65
Forecast: Better
The next Outlook will be held on Tuesday, April 27, at the Clarion Hotel
and Conference Center in Cherry Hill. For more information, contact Samantha
Collier.
Previous Quarterly Business Outlooks
- Fall 2003
- 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