Most New Jersey business leaders feel the state’s economic recovery from the COVID-19 pandemic will come at a much slower pace than the rest of the country — with many not expecting a rebound at all in 2021, according to the 62nd Annual Business Outlook Survey by the New Jersey Business & Industry Association.
When asked how New Jersey’s economy will fare in the first six months of 2021, 28% reported it would be better, while 40% said it would be worse. Respondents were decidedly more upbeat about the U.S. economic outlook. Some 54% thought the national economy would perform better through the first six months of 2021, compared with 17% who said it would fare worse.
In addition, one in three respondents said they expect their businesses will continue to lose revenue for the first half of 2021 — with 1 in 10 expecting the loss in revenue to continue throughout the entire year.
And, while 41% of business leaders think their company will make a profit in 2021, compared with 27% who do not, the net positive of 14% percent is the lowest it has been since 2012. And, of those who expect to make a profit, 41% feel it will be between 1-3%.
The results, released Monday morning, are based on 1,070 responses to the NJBIA’s annual survey. Most respondents were small businesses, with 66% employing 24 or fewer people.
And, this most be noted, the survey was taken in mid-September, prior to the second wave of COVID-19 the state and nation currently are experiencing. It’s difficult to gauge the impact this second wave would have had on responses — though it’s hard to imagine it would make people more optimistic.
For comparison, know this: During the seven-day week of Sept. 14-20, the state recorded a total of 3,373 new COVID-19 cases. The state has easily topped that mark on every individual day the past two weeks.
For a complete look at the survey, click here.
Below is a look at some of the questions and survey results:
Profit and loss
- P&L in 2020:
- 20% expect to report net profit;
- 62% expect to report a net loss;
- This is first net negative in earning (-42%) since 2012.
- P&L in 2021:
- 41% expect to have a net profit;
- Of those anticipating a profit, 41% expect it to be between 1-3%;
- 27% expect to have a net loss;
- Net positive (+14%) is lowest outlook since 2012 (9%).
- Reducing overhead, head count in 2020:
- Reduced salaries (20%);
- Furloughed employees (22%);
- Laid-off employees (23%).
- Raises in 2020:
- 54% of companies gave pay increases — down 23 percentage points from last year;
- 40% gave no raises — 19 percentage points more than last year;
- 6% lowered their wages — compared with 1% last year.
- Raises in 2021:
- 28% plan to provide bump of 1-2.9% — down 6 percentage points from this year;
- 42% plan to give no raises — 2 percentage points more than this year.
- Coming/going in 2020:
- 10% increased hiring;
- 33% decreased employment;
- Net negative (-23%) is first since 2012.
- Coming/going in 2021:
- 25% expect to increase hiring;
- 10% expect to reduce hiring;
- 65% expect hiring will stay at same pace.
Looking ahead/back at losses
- Future losses:
- 27% expect to lose revenue through the rest of 2020;
- 33% expect to lose revenue through the first half of 2021;
- 11% expect to lose revenue through all of 2021;
- 6% expect to lose revenue beyond 2021.
- Recovering 2020:
- 47% said they will take more than a year to, or never will, generate profits lost during non-essential business closures;
- 56% have sought additional or alternative funding sources through federal and state loans and grants as part of their coronavirus-based challenges.