In NJBIA’s 67th Annual Business Outlook Survey, New Jersey businesses in 2025 faced many challenges. These two were the most daunting: Statewide, soaring energy cost increases were a strong and largely unexpected deterrent to profits. Nationally, tariffs, or the uncertainty around them, proved difficult for some companies.
Those conditions created even more negative numbers around business affordability in New Jersey. When asked if New Jersey lawmakers had done enough to address business affordability in the previous 12 months, 81% said no. Seventy-seven percent said business affordability had fallen over the past five years.
In the survey’s performance comparison to other states, 78% said New Jersey was worse than its peers in controlling energy expenses. A year ago, only 53% said New Jersey was worse than competing states in controlling energy costs.
Only 10% said they believe New Jersey has made progress over the last year in easing regulatory obstacles, a common refrain among business owners that did filter down to both gubernatorial candidates while on the campaign trail this year.
“We say it often that businesses need predictability, and some did not see those challenges coming as it relates to energy costs, in particular,” said NJBIA President and CEO Michele Siekerka. “These results show a great need for more pro-business policy amid declining profits and expectations.
“While we are very encouraged that the incoming Sherrill administration wants to help reduce costs and burdens for small businesses, we are dismayed to still see legislation in Trenton that challenges job creators of all sizes and feeds into the anti-business reputation we have nationally.”
On Energy Costs
Seventy-seven percent of the 569 respondents, either business owners or upper-level managerial level staff, said they were substantially (32%) or moderately (45%) impacted by increased energy costs in 2025. Of those, 37% said they needed to raise prices to accommodate those largely unexpected costs.
Despite promises from gubernatorial candidates Mikie Sherrill and Jack Ciattarelli to remedy energy concerns, 81% said they were somewhat unconfident (35%) or not confident at all (46%) that those high costs would moderate in 2026.
On Tariffs
Forty-nine percent of respondents said tariffs impacted their supply chains in 2025. Of those impacted, 88% said they faced increased prices from their supply chains. A total of 81% said they were not confident at all (63%) or somewhat unconfident (18%) that they could absorb those raised input prices without passing them on to consumers.
Staffing
Forty-nine percent of businesses claimed they were challenged in finding staffing in 2025. That’s compared with 55% in each of the two prior years, and 70% in 2022 due to a pandemic hangover. In 2025, 17% increased hiring – down from 20% in 2024 and 23% in 2023.
Looking to 2026, 24% predicted they will increase employment, compared with 12% which predicted less hiring. Sixty-four percent said they’ll stay about the same.
Profits
From 2012 to 2019, more New Jersey businesses reported more gains than losses in this survey. That changed during the pandemic year of 2020, and the climb from that hole continues. In 2025, only 30% of respondents reported profits for the year. At the same time, and for a second straight year, 45% reported a loss. For 2026, 36% believe they will make a profit, compared with 28% who anticipate losing money. That net positive of 8%, however, is actually a step back from the 15% net positive forecasting into 2025. Of the 36% hoping to be on the plus-side for 2025, 12% are forecasting profits of 1% to 3%.
Sales
For a second straight year, 39% of respondents claimed an increase of sales. Of those, nearly 12% said they had a hike in sales between 1%-3%. Forty-six percent of businesses projected an increase in sales for 2026 – slightly below the 48% projected increase for 2025 in last year’s survey. That’s compared with 22% who foresee less sales next year. Overall, that’s a +24% net positive forecast for sales. Two years ago, that net positive outlook for sales was +17%.
Wages
In 2025, only 17% of businesses lifted pay for employees by 5% or more. That’s down 10 percentage points from last year and 17 percentage points from two years ago. All totaled, 68% increased wages in 2025; in 2024, 77% said they boosted wages. Looking ahead to 2026, 10% say they’ll increase wages by more than 5%.
Comparatively, a year ago when respondents were looking ahead to 2025, 16% said they would raise wages more than 5%. Another 34% said they’ll lift wages between 3% and 4.9% in 2025. All totaled, 67% said they’ll increase wages in 2026.
New Jersey Challenges
For the fifth straight year, the overall cost of doing business was listed as the most troublesome problem for New Jersey businesses – with 24% listing it as first among their top four. Health insurance costs (17%) were second, followed by property taxes (13%) and availability of skilled labor (10%).
New Jersey’s Competitive Levels
The leading competitive positive for New Jersey: 43% rate the quality of New Jersey public schools to be better than other states. At protecting the environment, 30% said New Jersey does better than other states. Twenty-seven percent said the quality of New Jersey’s workforce was better than other states and 29% said the state was a better place to live than other states.
The Garden State was listed as worse than others in taxes and fees by 87%, compared with 85% in 2024. In controlling government spending, 76% said New Jersey was worse than other states, compared with 70% in 2024. New Jersey was also listed as worse than other states in controlling health-care costs (69%), controlling labor costs (63%), attracting new business (63%), cost of regulatory compliance (60%), and attitude toward business (58%).
New Jersey’s Economic Climate
When respondents were asked about the current business conditions in their industry, 34% said they were experiencing a slowdown – the same percentage as last year – while 14% said they were experiencing an expansion. Eight percent said their industry was moving from a slowdown to a recovery, while 5% said they were moving from an expansion to a slowdown.
A majority (40%) said business conditions in their industry were staying the same. Fifty-nine percent said they had no plans to expand, while 26% said they would expand in another state, compared with 12% that would expand in New Jersey. Another 3% said they would expand in New Jersey and another state.
Economic Outlooks
Only 23% described the state’s economy as good, while 52% called it fair and 25% listed it as poor. Less than 1% called it excellent. Only 16% believed New Jersey’s economy would be substantially or moderately better in the first six months of 2026. A year ago, that positive look-ahead number was 23%.
A combined 41% said New Jersey’s economy will be moderately or substantially worse in the first six months of 2026. Overall, New Jersey has a -25% net outlook for the first half of next year. A year ago, looking at 2025, it was only a -3% net outlook.
Purchases and Prices
For a third straight year, 61% said prices for their products and/or services increased. For 2025, 6% increased substantially, while 55% increased modestly. Only 3% said they lowered prices this year. Regarding future purchasing plans, 39% are expecting to increase the dollar value of their purchases in 2026 and 22% are anticipating a decline. That’s a net positive of +17% for next year, compared with the +29% net positive outlook for 2025.
In 2025, only 52% of businesses said they made investments in productivity – a 10 percentage-point drop from 2024. That is the lowest percentage of investments in the survey since 2020, during the pandemic, when 50% of respondents made investments in productivity.
Questions for NJBIA’s 67th Annual Business Outlook Survey were sent to New Jersey business owners and executive staff in September and October, 2025. The report is based on 569 valid responses. Most respondents were small businesses, with 65% employing 24 or fewer people. The survey was conducted by Signet Research.
