We now close the books on the year in business for New Jersey. From Atlantic City to Newark and everywhere in between, 2017 was an interesting year with both highs and lows.
Let’s start first with perhaps the most positive development in the state, which is that employment growth is strong. Earlier this month, federal statistics showed that more people are working in New Jersey’s private sector businesses than ever before — a total of 4.1 million people. That number has risen steadily since 2009, and the state has now recovered all of the jobs lost, and then some, in the terrible recession that took hold about a decade ago.
One of the big employers in the state is the health care sector, and that industry dominated the headlines this year. In New Jersey, Horizon Blue Cross Blue Shield was in the crosshairs of the statehouse budget battle, as Gov. Christie wanted $300 million from the insurer’s reserve fund to help pay for drug treatment programs. Additionally, Horizon Blue Cross Blue Shield was the subject of lawsuits from hospital systems over its OMNIA health care plan. Meantime, the state’s hospital systems continued to form mergers and alliances, as rising health care costs shake up the industry. Hackensack Meridian bought JFK Health System, and RWJ Barnabas and Rutgers University partnered to create an academic health care system. But Cooper University Health Care recently ended plans to acquire three New Jersey health systems owned by Trinity Health. Most experts foresee continued changes in the health care industry, especially due to potential changes in government policy, which is prompting new partnerships that would never have been contemplated before. One example of that is CVS’s plans to acquire Aetna for $69 billion, the largest corporate acquisition this year. Briana Vannozzi looked at how the deal might impact consumers.
Another industry undergoing a seismic shift is retail, and those changes are being felt in New Jersey. 2017 was a dreadful year for retail, as nearly 7,000 store closing announcements were made, according to the retail think tank Fung Global Retail & Technology. On top of that, there have been over 600 retail bankruptcy filings, an increase of 30 percent, according to BankruptcyData.com. That included Wayne-based Toys R Us, which filed for bankruptcy protection last September in order to get some breathing room as it seeks to restructure debt. Retailers including Macy’s, Sears and K-Mart, just to name a few, closed some struggling stores in New Jersey.
We haven’t forgotten how to shop, we’re just doing it online. Amazon, which just reported its strongest holiday season ever, added thousands of jobs in New Jersey where it continues to expand. We’ll find out early next year if Amazon picks New Jersey for its second headquarters. The state threw its support behind Newark’s bid, which included $7 billion in state and tax incentives. Hundreds of cities and municipalities submitted bids to Amazon, hoping to be selected for HQ2, which Amazon says will include 50,000 new jobs.
Remember how long people have been talking about a turnaround for the casino industry in Atlantic City? The numbers this year show it may be time to end that discussion.
“Despite the loss of Taj Mahal, the industry is poised to report the first calendar year increase in casino win since 2006,” said Christopher Glaum, deputy chief of the Division of Gaming Enforcement. “Including internet gaming win, total gaming win is on track to have its second consecutive calendar year improvement.” Glaum made those comments to the Press of Atlantic City, after the Gaming Enforcement Division reported that overall casino gambling revenue totaled $206.4 million this year as of November, compared with $197.3 million in November 2016. The final yearly figures aren’t in yet, but so far the only casino that has seen a dip in gambling revenue since last year is Bally’s Atlantic City. We’ll end the year with the future remaining uncertain for the former Revel Casino. There were several false alarms this year in terms of the casino potentially opening under the new name TEN. Deadlines came and went, and still, that property remains shuttered. Meanwhile, Hard Rock International, owner of the former Trump Taj Mahal, is busy renovating the property for a planned reopening next year. One of our most amusing business stories this year was the liquidation sale of the Taj that was held over the summer. Chief Political Correspondent Michael Aron encountered an unexpected surprise when he covered that for us.
2017 was filled with some big money stories out of Trenton. The State Election Law Enforcement Commission reported this year’s gubernatorial election was the second most costly in New Jersey’s history, totaling $79.1 million, while independent spending on the legislative races hit a record, totaling $23.1 million.
There was some slightly positive news on the state’s underfunded public pension system, which returned more than 13 percent on its investments. That was better than expected, but the system remains woefully underfunded, even after Gov. Christie used proceeds from the state lottery system to try to shore up the fund.
The health of the pension system will likely be a big story next year, as will the spending priorities of Governor-elect Murphy. Several business groups, including the New Jersey Chamber of Commerce and the New Jersey Business & Industry Association, say a key priority must be making New Jersey more affordable for businesses and residents.
Another big story in 2018 will be what happens to the stock market, after the Dow Jones Industrial Average rose more than 25 percent this year. The impact of federal tax reform will be another story we’ll continue to watch closely. We’ll also keep our eye on New Jersey’s many redevelopment projects and will continue to report on the opening of new businesses around the state.
Here’s hoping 2018 is year of opportunity for both New Jersey’s Fortune 500 companies, and the thousands of small businesses around our state.