Business confidence in the State's economy and the State's business climate has fallen to the lowest levels since the early 1990s, NJBIA's 2007 Business Outlook Survey has found (see full report).

Employers participating in the survey voiced growing concern about the near-term economic outlook at all levels—from the US economy to their own companies—but reserved their bleakest assessment for New Jersey. Fifty-one percent of survey respondents said they expect State economic conditions to deteriorate in the first half of 2007, while only 12 percent anticipate improvement. This is the most downbeat assessment since surveys conducted during the 1989-92 recession. However, most respondents who expect a worsening of conditions anticipate that it will be only moderate.

“In the midst of an economic slowdown, our members see more of the same ahead: very slow growth,” said NJBIA President Philip Kirschner, who presented the findings during a November 28 news conference at NJBIA's Trenton headquarters. While collective expectations for sales and profits have fallen to the lowest levels since the 2002 recession, respondents still expect growth in those areas, but at a very slow pace.

According to the survey findings:

• Forty-three percent of companies expect sales to rise in the year ahead (versus 49 percent in the previous survey), while 29 percent foresee declines (versus 25 percent in the previous survey).

• Thirty-seven percent said they expect profits to increase in 2007 (versus 43 percent in the previous survey), while 36 percent project a decline (versus 32 percent in the previous survey). Thus, only a net 2 percent of survey respondents (adjusted for rounding) expect profit growth.

• Twenty-one percent of respondents said they expect to hire more workers in 2007, compared with 24 percent last year, while 12 percent anticipate making cutbacks, compared with 10 percent last year.

Of particular concern is the rating NJBIA members gave the State's business climate. Only 17 percent said the State is a good place for the expansion of business facilities, down from 28 percent in the preceding three surveys. This is the lowest rating since the question was first asked in 1985.

The 2007 Business Outlook Survey questionnaire was distributed to NJBIA's 23,500 member companies in September 2006. The survey findings are based on the first 1,700 responses. Respondents came from every industry and every region of the State. Three quarters of the responses came from small companies with one to 24 employees.

Mental Health Mandate Raising Insurance Premiums Clears Senate Budget Committee—Employers purchasing health insurance in New Jersey's regulated market can expect their premiums to rise even higher under legislation that would mandate unlimited coverage for all behavioral problems and substance abuse. The bill, S-807 (Vitale, Buono), was released November 27 by the Senate Budget and Appropriations Committee and now heads to the full Senate for what may be quick consideration. NJBIA vigorously opposes this bill. Mandates like this are part of the reason health insurance costs are rising at three times the rate of inflation. According to Families USA, health insurance costs for New Jersey employers rose 80 percent between 2000 and 2006, with an average family plan now costing $13,620 per employee.

These cost increases are forcing some employers and employees to go without health insurance altogether. The NJ Mandated Health Benefits Advisory Commission has estimated that the increase in premiums would cause at least 5,000 people to lose all of their health insurance. In other words, while someone addicted to pain killers might get unlimited insurance coverage for more rehab, someone else would lose their insurance coverage for chemotherapy, insulin, or an emergency appendectomy. Furthermore, health insurance plans in New Jersey are already required to provide coverage for behavioral disorders and substance abuse, albeit with reasonable limits to ensure broader access.

In light of the dismal ratings employers gave New Jersey's business climate in NJBIA's 2007 Business Outlook Survey, legislators should reject bills like this that will make the situation worse. Contact your legislators today and tell them not to vote to increase health insurance costs. For more information, contact Christine Stearns at ext. 260.

Economic Growth Committee Releases Regulatory Flexibility Act Changes—NJBIA-backed legislation that would ease the regulatory burden for small businesses was released November 27 by the Senate Economic Growth Committee. S-1335 (Sarlo, Kyrillos)/A-2327 (Chivukula) would make several changes to the way State agencies promulgate rules that affect small businesses. It now heads to the full Senate for consideration.

The New Jersey Regulatory Flexibility Act requires State departments and agencies to recognize the impact regulations have on small business. S-1335/
A-2327 would require agencies to simplify and consolidate reporting requirements for small businesses when adopting or revising regulations. Most importantly, the bill would grant small businesses adversely impacted by a regulation the right to challenge the rule in court. Small businesses could petition the Appellate Division of the Superior Court, within 90 days after the date of final agency action, to force a department to adequately assess the impact of the rule on small businesses. “The judicial review finally gives teeth to the Regulatory Flexibility Act,” NJBIA Vice President David Brogan said. For more information, contact David Brogan at ext. 236.

Corzine, Legislative Leaders to Speak at Dec. 12 Public Policy Forum—This annual high-level conference brings together New Jersey’s top leaders in business and government for a thorough and lively discussion of current issues that have a great impact on New Jersey employers. Governor Jon Corzine will be our keynote speaker, and will be joined by four of the State’s top legislative leaders, seasoned political observers and experts on the New Jersey economy. Don’t miss this great opportunity to network with fellow business colleagues!

The event will be held from 7:45 a.m. until 2:00 p.m. at the Sheraton at Woodbridge Place in Iselin (Exit 131A, Garden State Parkway). The cost is $170 per person for NJBIA members and $230 for nonmembers. Breakfast and lunch are included. To register, contact Stacy Wichner at 609-393-7707, ext. 213, or register online now. Gain high profile exposure by becoming a sponsor; contact Sherry Esteves, ext. 219.

Raise Your Visibility. Become an Event Sponsor—The Awards for Excellence Dinner. NJBIA's Public Policy Forum. First-rate events like these offer your company an excellent opportunity to reach their target audiences and heighten their visibility as an event sponsor. Learn more about becoming an NJBIA sponsor by contacting Sherry Esteves at 609-393-7707, ext. 219.