View Full Version : Metro Economy Aided by New Jersey Bounce

June 14th, 2004, 12:00 AM
June 14, 2004

Metropolitan Area's Economy Is Aided by New Jersey Bounce


Its jobs lost in the recession, Professor Seneca said.

Companies across the state - from tiny Heliport Systems of Morristown, a four-person firm that builds helicopter landing pads for hospitals and is adding another engineer because it is so busy (it cannot take on any new work until 2006), to big pharmaceutical and financial firms - are adding workers, according to economists and employment agencies.

"These companies are blossoming over there," said Edward Fleischman, president of the Execu/Search Group, a staffing company based in Manhattan that has clients in New Jersey. "It's unbelievable what is going on down there."

New York City has added just 12,600 new jobs since April 2003, according to the State Department of Labor, and is still more than 200,000 jobs short of its employment peak, which came in December 2000.

In April, the last month for which data is available, New Jersey's unemployment rate was 5.3 percent, compared to New York's 7.5 percent, according to figures released by each state's Labor Department.

New Jersey ranked 4th in the nation in job creation over the past year, Professor Seneca said, well ahead of New York, which ranked 10th, and New Jersey was the only Northeastern state to crack the top five.

New Jersey also did better than any other locale in the region, beating out the Westchester, Connecticut and Long Island suburbs. In terms of job creation, it is beating the national economy, too. Of the 2.6 million jobs shed nationally since January 2001, 1.4 million have been regained, a little more than half.

But rather than being an anomaly, economists say, New Jersey's rapid growth is a return to the norm after an unusual period in which New York overtook its neighbor to the west.

"It was unusual in the late 1990's that New York City was growing faster than New Jersey," said Jason Bram, regional economist at the Federal Reserve Bank of New York. "It was driven by the financial sector and the dot-com sector. To some extent, New York City was operating above full capacity in late 1990's. If you look at almost any decade, you see New Jersey growing a bit faster than New York."

By one important measure, New York City's economy has not grown appreciably since 1950. That year, there were about 3.5 million workers in the city, roughly the same number as there are today.

New Jersey has been adding jobs at the rate of 50,000 a year since World War II, more than doubling its work force. In 1950 the state had 1.7 million workers; it now has more than 4 million.

Of course, New Jersey in 1950 had plenty of land for new businesses and residents, whereas New York City in 1950 was already quite full. Another important difference between the two states is that New Jersey's economy - unlike New York's, which is dominated by Wall Street - is diverse and less susceptible to sudden shocks, like the attack on the World Trade Center in 2001.

"I think what that really speaks to was how hard New York was hit" in the recession of 2001 and 2002, said Timothy A. Blake, an analyst at Moody's Investor Service who follows the regional economy. "New Jersey's employment numbers did not come down nearly as much as New York's. They have a more balanced economy, which is not as tied to the financial services sector. They have the pharmaceutical sector, which has been much more consistent, and it has a big telecom sector and a biotech sector as well."

New York's fortunes, by contrast, rise and fall largely with Wall Street, he said.

And historically, economists say, New Jersey's wealth and job creation would simply not exist to the extent they have were it not for the humming economic engine of the New York financial industry.

A good portion of the growth in Jersey City and other communities near Lower Manhattan, for example, has come from Wall Street overflow, with firms relocating so-called back-office workers to New Jersey. New York City's loss has often been New Jersey's gain, said Robert Kurtter, who tracks the city economy for Moody's Investor Service.

"It is a bedroom community for New York and Philadelphia, so consequently it is an area that has benefited from suburbanization from both cities, and has also benefited from companies that suburbanized as well."

But in a larger sense, New Jersey's economy survived the recession better and recovered more quickly because New York's role as the beating heart of the regional economy, pumping money into suburbs in the form of Wall Street bonuses and stock options, has steadily declined, said Marc M. Goloven, senior regional economist for J. P. Morgan Chase and the author of a monthly newsletter on the city economy.

In the past, "when New York City fell into a protracted economic slump, we all received an equal opportunity clobbering," Mr. Goloven said. "This time it did not happen that way. It is as if there has been a figurative sea wall built around five boroughs beyond which New York City's recessionary tide did not spread. No longer are the overarching tentacles of New York City's economy felt everywhere."

Copyright 2004 The New York Times Company

June 14th, 2004, 10:37 AM
New Jersey has been booming since 1996, that's when housing construction and the expansion of warehouse and Suburban Corporate parks have been growing rapidly.

Quick story..

I was having dinner with my Girlfriend Thursday at Nobu, there was a large party of typical Tri-Beca family (guy looked like Martin Scorsazee). Anyway they were talking about buying a home in Manalapan New Jersey.

Manalapan is where my girlfriend and I Live, we've lived here most of our lives and went to school together. It used to be a quiet Monmouth County enclave for NYC Teachers, now they are squeezing Million Dollar homes on every available lot.

Alot of the NYC expatriots are relocating their business down here, and doing just as good if not better in some circumstances than they were in Manhattan and Long Island.

The State and Suburban communities are much less dependent on NYC and Philadelphia pay checks than they were say in the 1980s, that's evident by the amount of small and large busineses that are relocating to New Jersey.

And Speaking of Wall Street, or the Wall Street Journal in particular.

They (Dow Jones/Wall Street Journal) have moved the majority of their Work Force to the Princeton area along the Route 1 corridor, joining other large local companies such as Bristol Myers Squib.

I went to visit a client in the Dow Jones headquarters in Princeton which is massive, the client commented that after 9-11 everyone except the top few Executives have had their Offices moved to New Jersey. The WSJ had between 10-12 floors in their Manhattan headquarters prior to 9-11, today they occupy 2 or three floors with Executive Offices.