NJ businesses answer: Will the economy improve in 2025?

⚫ Less than a quarter of NJ businesses expect an improved economy

⚫ Sales were down in 2024, and inflation caused significant impacts

⚫ Employers feel like they're not getting enough attention from government

Approaching the end of a rough 2024, business owners and executives in New Jersey aren't feeling all that great about 2025.

They're bracing for a new regime on the federal level, and creating a wish list for whichever candidate eventually wins the November 2025 race for New Jersey governor.

In the 66th annual business outlook survey from the New Jersey Business & Industry Association, 23% of respondents said the Garden State's economy will improve in the first six months of 2025. According to 26% of respondents, the economy will worsen over the next six months.

"I observe a lot of trepidation in the answers," said Michele Siekerka, president and CEO of the NJBIA. "Businesses need predictability and reliability in order to make decisions ... and I think they're not seeing a lot of that right now, so that's causing them to hold their breath a little bit."

Looking back

NJBIA received a resounding "no" in its survey when employers were asked whether lawmakers and Gov. Phil Murphy have done enough to address affordability over the past year. And nearly 80% of businesses said affordability has decreased over the past five years.

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Forty-six percent of outlook-survey respondents said they were substantially impacted by inflation in 2024, compared to 36% who said the same in 2023.

More than half said it was a challenge to find appropriate staffing.

"Unfortunately, sales were down in 2024, profits were down a bit in 2024, and some were even reporting losses," Siekerka said.

Looking ahead

Close to half of the businesses surveyed by NJBIA project an increase in sales for 2025.

Just under 30% said they plan to increase employment next year.

When asked which move the next governor of New Jersey could make to generate the most positive impact, employers were most likely to say "lower property taxes."

“That a reduction in property taxes is desired by New Jersey businesses isn’t necessarily surprising, but the idea that they never seem to be in the conversation for property tax relief by policymakers is,” Siekerka said.

Next on employers' wish lists is a reduction in health insurance costs. Rounding out the top three is lower corporate taxes — New Jersey in 2024 re-established its ranking as the state with the highest corporate income tax in the nation.

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