From the Record:
New Jersey’s economy has rarely failed to disappoint in recent years, but economist Joel Naroff thinks that may change in 2016.
He foresees a solid national performance, with economic growth of around 3 percent. And while New Jersey won’t match the nation, the state will enjoy a similar performance – unlike past years, when the state has clearly lagged, Naroff said.
“We are beginning to follow national trends again,” said Naroff, who is economic adviser to the Trenton-based New Jersey Business and Industry Association, adding that his comments reflect only his own views. “That’s good news.”
“I am positive about the direction the state’s economy is going in,” he said. “I am not saying it’s going to be strong. We are not going to have a great economy. But we had improvement in the second half of 2015, and that will carry through to 2016.”
The upbeat forecast from the economist, who heads his own consulting company, contrasts with his past laments about the state’s lackluster economic recovery.
He has worried that no industry appears to be strong enough, or with enough potential, to lift the state out of the doldrums created by the decline of such past powerhouse sectors as manufacturing and telecommunications, the downsized casino industry, the weakened financial sector and the diminished pharmaceutical industry.
Yet the state is coming into its own as a distribution, logistics and warehouse hub, and that will help, Naroff said. The rise of online shopping requires logistical excellence to get goods purchased online quickly to consumers, and the state’s ports, infrastructure and proximity to the vast metropolitan market make it well placed to benefit from the shift, he said.
Outside of that, Naroff said the economy will be helped by a rise in incomes, which will have an “outsized” impact on New Jersey, because of its dense population.
“I think the state economy accelerates in 2016, in no small part because we will finally start seeing better income gains,” he said. “And that feeds back. Income gains means greater demand. Greater demand means more hiring. More hiring means more income. And you set off this positive impact.”