Today the Atlantic City Press published another bleak economic forecast for the southern New Jersey region at http://www.pressofatlanticcity.com/business/stockton-report-details-series-of-job-loss-scenarios-as-atlantic/article_3fcce228-1769-11e4-bbe4-0019bb2963f4.html. This new report is based on a Stockton economic professor’s report. Another earlier study released last month by the U.S. Conference of Mayors and HIS Global Insight predicts that for the rest of this decade the Atlantic City/Hammonton region will have one of the slowest economic growth rates of the entire United States. The mayors’ report was made even before the news of additional casino closings were announced. The mayors’ report is at http://usmayors.org/pressreleases/uploads/2014/06-release-metroeconomies.pdf
We might consider that there are actually three distinct economies in southern New Jersey: 1) The “shore” region consisting of Atlantic and Cape May Counties. 2) the rural agricultural economy of the west coast Cumberland and Salem County (my location), and 3) the Philadelphia suburb further north expanding westward from the Cherry Hill/Camden area. Each has its own challenges but the shore region seems at risk for the most dramatic impact. An extended economic decline in region #1 would likely have ripple effects to #2 and #3 since many of the local businesses in these regions sell to the tourism, summer homes and recreation industries in #1 area. For example, it is common for remodeling contractors located in region #2 and #3 to drive to region #1 for the majority of their jobs.
I am also concerned about the even larger long-term economic impact of sea level rise response. Indications we’ve read say are that this will take a large toll on both public sector by triggering lower tax base from reduced property values as well as the private sector where some portion will be pushed to relocate. The NJ shore region has not really felt the impact yet but parts of the Delaware state shore towns and the western NJ bay shore towns are already in a state of recession in response to recent climate-related costs.
I suggest to my clients that we need to consider that business planning in southern New Jersey should not begin with the same fundamental assumptions as we have used in the past. We need to consider the possibility of declining real estate values, higher business taxes, and the business risks that come when individuals are placed under increased financial stress. There certainly are opportunities, but I suspect that it will be more challenging for many South Jersey businesses to maintain a healthy level of profits going forward.