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The economic outlook among New Jersey employers has fallen to recession levels, and their plans for hiring more workers have fallen to the lowest level in 18 years, the New Jersey Business & Industry Association said today in releasing the findings of its 2009 Business Outlook Survey.

Whether evaluating actual conditions in 2008 or anticipating what 2009 will bring, the survey's 1,450 respondents presented a mostly gloomy assessment of current and future economic conditions.

"Our survey indicates that New Jersey has been in the grip of a recession for much of 2008," said NJBIA President Philip Kirschner. "Many businesses are struggling to survive, and they expect things to get worse in 2009."

Employers reported a sharp drop in sales, profits and employment over the past year, and 69 percent of companies said their industries were already in a recession or heading into one when this survey was conducted in September.

Only 17 percent of companies said they expect to expand employment in 2009, with another nearly 20 percent saying they expect to shrink their payrolls.  The net percentage expecting to hire more workers, at -3 percent, is at the second lowest level of the past 28 years. Only the 1991 survey produced a more negative employment outlook.

Survey participants reserved their bleakest outlook for the New Jersey economy, with nearly six in ten saying business conditions here will get worse before they get better, a more negative view than was seen in the 2001 recession.  This follows three consecutive years of declining business confidence and business conditions as measured by this survey.

What follows is a summary of some of the survey’s main findings:

Twelve percent of survey participants said New Jersey is a "good" place for expansion of their business facilities, the lowest level in 25 years.  They also said the overall cost of doing business in this state, along with the cost of health insurance, is their most troublesome problem.

When this survey was conducted in September 2008, 54 percent of survey participants reported that their industries were in a recession, with another 15 percent saying their industries were heading into a recession.  This marks a ten-year high for the survey’s recession indicator.

A majority of respondents in every industry sector except healthcare said their industries were in a recession or heading into one. The retail and housing construction sectors have been hardest hit, with 87 percent and 85 percent of respondents in these sectors reporting, respectively, that their industries were in a recession or heading into one. 

The short-term outlook for individual industries has fallen to the lowest level since the 1992 survey.  Forty percent expect conditions in their industry to deteriorate in the first six months of 2009, while only 22 percent expect conditions to improve, with the rest expecting things to stay about the same. 

Businesses are no more ready to spend than they are to hire.  The outlook for business spending in 2009 is essentially flat, with 32 percent expecting to spend less on purchases in 2009, and 33 percent of businesses expecting to spend more.  The rest expect to spend about the same amount.  This is the weakest outlook for business spending in 18 years.

The outlook for sales and profits at individual companies has fallen dramatically from last year’s levels, retreating to lows seen in earlier recessions. Forty-one percent of companies said they expect their sales to increase over the next 12 months, down from 57 percent of companies having this expectation last year. And 29 percent expect their sales to decline over the next 12 months, compared with 21 percent who had this expectation last year. 

The 2009 survey was conducted in September 2008.  The findings are based on the first 1,450 responses.  Of this group, 83 percent were small companies with 1-49 employees.  Responses came from New Jersey businesses in all 21 counties and every major industry.