New Jersey enjoyed another year of excellent economic activity in 1998 with its economic well-being dramatically improved, according to the annual Economic Review and Outlook released by the Governor's Council of Economic Advisors today.
"Not since 1987 and 1988 has the State had a similar economic performance," said Council Chairman Joseph J. Seneca. "Low inflation rates continue to benefit New Jersey consumers while low interest rates continue to boost housing and consumer durable expenditures. As an economic report card, it really doesn't get better than this. The economic well-being of our state has been dramatically improved."
New Jersey's unemployment rate fell to 4.9 percent in 1998, its lowest level since 1989. The State's average employment grew by almost 77,000 jobs, or 2.1 percent in 1998, with growth concentrated in five core business clusters (high technology, logistics, health, finance and entertainment). Over the past decade employment in these clusters has grown by 19 percent compared to 4 percent for all other sectors.
The council predicts continued, although more moderate growth for the New Jersey economy into the new millennium. Employment growth is expected to be in the range of 45 to 50,000 for the next two years as the five core growth business clusters provide the foundation for future employment growth. Unemployment is forecast to fall to an average of 4.5 percent for the next two years.
Personal income growth rose to 5.4 percent and remained comparable to the national average. Retail sales expanded by 6.2 percent spurred by a healthy job market, low interest rates and income gains. Slower but sustained growth is expected in these areas for the next two years.
New Jersey's Gross State Product grew by 4.6 percent in 1998 with inflation-adjusted GSP growth remaining close to the national average.
Residential construction had its largest gain since 1988, with housing permits exceeding 34,000 units. Non- residential construction will continue to be a driving economic force, especially on the Hudson waterfront and in the Princeton-New Brunswick corridor.
Due mainly to decreased trade opportunities with Asia, export trade dipped modestly in 1998. However, increased trade with the Middle East, Israel in particular, Western Europe and NAFTA will continue to sustain New Jersey's future trade activity.
Regionally, the spill-over from New York City's jobs gains benefited New Jersey and the businesses that service and support the metropolitan economy. While all of New Jersey's labor areas experienced growth in 1998, Middlesex-Somerset- Hunterdon had the highest rate of growth at 3.5 percent. Camden, at 2.8 percent and Vineland-Millville-Bridgeton, at 2.3 percent were the only other areas that exceeded the state growth rate of 2.1 percent.
"New Jersey's excellent economic performance has decreased unemployment, raised personal income and assisted in revitalizing our urban centers," said Seneca. "By focusing State policy to provide the necessary foundation of an efficient and modern infrastructure and a well-educated workforce, the New Jersey economy will remain strong well into the new millennium."
Last Updated: Tuesday, 09/21/10