Over the last three years, 74,000 manufacturing jobs have vanished in New Jersey, an 18 percent drop that has accelerated a long-term trend of manufacturing employment losses. New Jersey is at risk of losing one of its most valuable economic assets-a healthy and vibrant manufacturing sector.

Today, at a Manufacturing Summit in Newark, the New Jersey Business & Industry Association kicked off its Campaign for Manufacturing Renewal to shine a bright light on this vital but neglected sector of the State economy. Nearly 200 manufacturers, their suppliers and customers were expected to attend.

"This is our kickoff event. Our goals are to let people know why manufacturing is so important to New Jersey, call attention to the obstacles that stand in the way of manu-facturing success, and work with government to find ways to keep good manufacturing jobs here in New Jersey," NJBIA President Philip Kirschner said.

Nearly 12,000 New Jersey manufacturers still employ 345,000 production workers, representing 10 percent of the State's private sector workforce. These companies pay above-average wages and benefits, support nearly 200,000 jobs in other industries, generate $42 billion in annual economic output, produce $15 billion a year in exports, and remain highly productive and innovative.

"Even though manufacturing remains a vitally important part of our economy, it does not get the attention or resources it deserves. We must take steps to secure the future success of manufacturing in this State," Kirschner said.

At the Summit, leaders in business and government discussed the obstacles to manufacturing success in New Jersey and looked at ways to strengthen the state's manufacturing climate. Kirschner also unveiled the Association's Agenda for Manufacturing Renewal, which identifies major obstacles and details 31 steps that State government can take to keep manufacturing jobs in New Jersey.

New Jersey manufacturers are challenged by national and global issues, such as trade policies, currency valuations, and foreign competition. But they also are challenged by the high and rising cost of doing business in New Jersey.

"From health insurance to regulatory compliance, taxes and energy, New Jersey has some of the highest costs in the nation. This makes it very hard for our manufacturers to compete with companies in other states, particularly our neighboring states," Kirschner said. "It is essential that we take aggressive steps to lower these costs."

Among the speakers featured at the Summit were three manufacturing executives, five legislators and State Treasurer John E. McCormac, who presented the views of Governor James E. McGreevey on the subject of manufacturing. The manufacturing executives were Fred Barre´, chairman and CEO of The Barre´ Company Inc.; Lisa Hirsh, president and CEO of Accurate Box Company, Inc.; and Clifford F. Lindholm III, president of Falstrom Company. The legislators were Senators Nia H. Gill and Joseph M. Kyrillos and Assembly representatives Guy Gregg, Linda Stender, and John S. Wisniewski.

The New Jersey Business & Industry Association is the nation's largest state-level employer association. It has more than 23,000 member companies of which more than 3,700 are in manufacturing.

Executive Summary
Facts about NJ Manufacturing-In its report, Why Manufacturing Counts in New Jersey, the New Jersey Policy Research Organization (an NJBIA affiliate), details the contributions that manufacturers make to the State economy. There are nearly 12,000 manufacturers in the State, which collectively employ 345,000 production workers. The vast majority of these companies (86%) are small, with between 1 and 49 employees.

The NJPRO report details many notable facts about New Jersey manufacturing, among them:

• As of April 2004, New Jersey manufacturers in diverse industries employed 345,000 production workers or one out of every ten people employed in the State's private sector.
• The greatest concentration of manufacturing jobs (151,273) is in the northeastern counties of Bergen, Essex, Hudson, Passaic and Union. The next biggest concentration (80,230) is in Hunterdon, Mercer, Middlesex, and Somerset.
• The biggest industry clusters are in pharmaceuticals and medicines (40,000), other chemical products (34,200), computer and electronic products (32,300), and food products (31,700).
• In 2003, New Jersey manufacturers paid an average yearly wage of $53,028-$9,316 or 21 percent more than the average wage paid by all private-sector New Jersey employers. It was also $8,620 more than the average wage paid by manufacturers nationally.
• New Jersey manufacturers generated $15.3 billion in exports in 2003 or 90 percent of total New Jersey exports of $17 billion.
• New Jersey manufacturers generated $42 billion in economic output in 2001 or 12 percent of New Jersey's total Gross State Product of $365 billion.

To better identify those obstacles, NJBIA surveyed its 3,700 manufacturing members in January 2004. More than 430 manufacturers participated in the survey, and they identified the state-level problems they consider to be the biggest obstacles to the future success of their New Jersey operations.

Manufacturers participating in the survey identified the cost of health insurance as the single biggest obstacle to the retention or expansion of their businesses in New Jersey. The second most significant obstacle was the overall cost of doing business in this State, which would include such things as the high cost of health insurance, property taxes, State business taxes, energy and state regulations.

State government's attitude toward business and high property taxes shared third place in the ranking of obstacles. Survey participants also expressed significant concerns about the costs of energy, liability insurance costs, the availability of skilled labor, wage and labor costs, State regulations, and State business taxes.

Details on the obstacles can be found in NJBIA's report, 2004 Manufacturing Survey Findings. Executive Summary
Agenda for Manufacturing Renewal-A core group of more than 40 manufacturers met on April 2, 2004, at NJBIA's Manufacturing Task Force Meeting to hammer out an action plan to improve New Jersey's manufacturing climate. Following are highlights of the Agenda:

Health Insurance-Manufacturers are anxious to find ways to quell the rapidly rising cost of health insurance. They felt the State Legislature should do its part to lower insurance costs by utilizing the new Mandated Health Benefits Commission to scrutinize costly new health coverage mandates before they are enacted into law. Likewise, they felt the Commission should be used to review all existing mandates, which add about 20 percent to the cost of health insurance policies. Finally, they would like the State to offer tax incentives (such as business-income tax deductions or credits) to employers that do provide employee health insurance coverage.

Overall Cost of Doing Business in New Jersey-The high overall cost of doing business in New Jersey is of great concern to New Jersey manufacturers, and most of the ideas in this Agenda seek to reduce those costs in well-defined areas, such as taxation and regulation. However, some areas of high cost are more difficult to define, such as workplace mandates.

These mandates impose rules on New Jersey employers that are more onerous and costly than those found in other states. Legislators should resist efforts to enact a first-of-its-kind, paid-family-leave mandate in New Jersey. To offset the high cost of doing business in this State, manufacturers also favor the enactment of a manufacturing retention tax credit. This would be made available to any New Jersey manufacturing company that invests in capital equipment, plant renovation, modernization or expansion.

Property Taxes-High property taxes, already among the very highest in the nation, are a burden to business property owners as well as to homeowners. Manu-facturers would like to salvage a legitimate protection against even higher property taxes. The State's Business Retention Act states that the property tax should not be levied on a business's machinery and equipment. This exemption is currently the subject of a State Tax Court challenge that seeks to overturn it. The State Legislature must reaffirm this exemption. If it is not affirmed, manufacturers could become subject to tens of millions of dollars in additional property tax levies.

Energy Costs-New Jersey's high energy costs are a particular burden to manufacturers, who pay some of the highest energy rates in the nation. New Jersey can cut these costs dramatically by exempting manufacturers from paying the State energy tax of nearly 10 percent.

State Regulations-New Jersey's costs of environmental compliance are among the very highest in the nation, primarily because the State has a history of enacting strictest-in-the-nation regulations. Its fees, fines and penalties are among the highest in the nation. The NJ Department of Environmental Protection (DEP) should stick to federal standards used by most states and reduce its fees and fines.

State Taxes-Two years ago, the State balanced its budget with a $1 billion corporate tax increase in the middle of a recession. This tax increase should be repealed. Corporations should be allowed to take net operating loss deductions, which were suspended two years ago with a promise that they would be fully restored in 2004.

Skilled Labor-Even in a weak economy, manufacturers often have difficulty finding the workers with the skills they need to run their businesses. In addition to bolstering workforce training programs, the State should expand internships linking high school students to manufacturing career opportunities, strengthen career guidance for high school students, and expand its apprenticeship program for manufacturers.

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