By Bill Conroy
The Garden State’s economy is diverse, but growth remains elusive.
The Garden State, New Jersey’s nickname, is a leading producer of blueber-ries, cranberries, peaches and tomatoes as well as wines and seafood, and is
home to Goya Foods and Campbell Soup. The state also has a history as a
hotbed of technology and manufacturing innovation.
Albert Einstein lived and worked in Princeton, New Jersey, from the mid-
1930s until his death in 1955. In addition, New Jersey is where Thomas Edison did much of his pioneering work in inventing the phonograph and the
incandescent light bulb.
The state’s manufacturing sector, which remains a major economic engine
for New Jersey, can trace its roots back to at least 1791, when the Society for
Establishing Useful Manufactures, a quasi-government body that was spearheaded by then-U.S. Treasury Secretary Alexander Hamilton, was established to promote manufacturing businesses along the state’s Passaic River.
Today, New Jersey boasts a diversified economy that is propelled by technology, manufacturing, health care and financial-services companies. Those four
sectors comprise about a third of the state’s gross domestic product (GDP).
On the manufacturing side, chemical products, food processing and computer and electronic components represent the bulk of the sector’s production. Global companies like Novartis, Honeywell, Panasonic, the Pinnacle
Food Group and Unilever all have significant operations in New Jersey.
With respect to health care, a dozen of the top 20 biopharmaceutical companies in the world have headquarters or major operations in the state. Overall,
nearly a half million people across some 22,000 service providers, including
hospitals and research institutions, are employed in the New Jersey’s health
care industry, according to the nonprofit Choose New Jersey.
Technology is another major driver of the Garden State’s economy. New Jersey
is home to more than 5,000 information and technology companies,
including wireless provider Verizon, according to U.S. News & World Report.
The state also hosts the headquarters for three of the world’s top 100 fintech
companies — IPC, Cognizant and Collabera. On the financial-services front,
12 of the Garden State’s top 75 employers operate in that sector, including Bank
of America, Prudential Financial Inc. and Ernst & Young.
Despite the state’s broad economic footprint, New Jersey was stung hard by
the Great Recession and still has not fully recovered from the shock. Between
2007 and 2017, the compound annual growth rate for New Jersey’s real GDP
was 0.2 percent, compared with the national GDP growth rate of 1.2 percent.
The state’s anemic GDP growth is compounded by a regulatory environment
and a high cost of doing business that inhibits startups and innovation,
according to a 2017 study by the consulting firm McKinsey & Co. As evidence
of that trend, the study points out that the Garden State has only 15 incubators
and business accelerators, compared with 179 in nearby New York and 375 in
What the locals say
“One issue here in New Jersey, because we had so many foreclosures
and short sales, the people moving out of those houses weren’t
buying another house, and we’re still being affected by that. … Next
year will be … steadily sporadic. If it looks like the rates are going
to come down some, more people will buy houses. If the rates
continue to go up more, fewer people will be looking to buy. A lot of
it will be driven by rates and the economy. And, hopefully, as we get
through the foreclosures, we will start getting more buyers that are
buying from people who are going to buy another home.”
Christian J. Schlueter
President, New Jersey Realtors
Home sales and prices
Home sales in New Jersey were throttled by the Great Recession, like other
areas of the nation, and have only begun to rebound significantly in the
past several years, according to press reports and data from the New Jersey Realtors (NJR). The median sales price for a home in the Garden State
has bounced back as well, as inventories have tighten, but it still remains
below pre-recession highs, according to a report by N.J. Advance Media.
Year to date through August of this year, the median sales price for a
home in New Jersey stood at $316,000, according to NJR. Although that’s
only a partial-year result, it is up significantly from the full-year mark in
2017 of $305,000. For 2016, according to NJR, the median sales price
came in at $302,000. Home sales have been on a steady upward climb
since at least 2015, when 64,744 homes sales were closed in the state.
By 2017, that figure had jumped to 81,871 closed home sales, NJR
New Jersey Home Sales
Source: New Jersey Realtors
Closed home sales Median sales price
Year to date through September 2018