Central Region Summary

Review of 2007 and Outlook for 2008

 

The Central Region recorded growth in total nonfarm employment for the sixteenth consecutive year, reaching a level of 1,278,700, up by a robust 11,700 jobs in the first nine months of 2007 compared with 2006.  Employment gains were demonstrated in both of the region’s labor areas as the Edison Labor Area added 7,200 jobs and the Trenton-Ewing Labor Area added 4,500 jobs over the nine-month period.  The region’s growth rate over the period was above the state’s growth rate (0.9% vs. 0.5%).

 

The Central Region’s significant employment gain over the first nine months of 2007 occurred in the following private sectors: professional and business services (+3,200), other services (+2,800), leisure and hospitality (+1,700) and educational and health services (+1,700).

 

The boost in professional and business services can be attributed to the increase of employers utilizing outside businesses to perform support functions.  Other services’ average employment for the first nine months of 2007 more than doubled compared with last year’s (+1,400).  Leisure and hospitality jobholdings expanded as hotels such as the Heldrich Center and a Residence Inn opened in the region.  Educational and health services continued to generate employment, despite growing at a much lesser rate in 2007 than 2006 (1.0 % vs. 2.3%).

 

The region’s job losses occurred in trade, transportation and utilities (-1,300) and manufacturing (-1,100).  The reductions were partially due to companies restructuring their workforce or relocating out of New Jersey.

 

Economic growth in the Central Region should continue in 2008.  The five-county region’s projected population of 2,740,200 in 2009 should have an impact on payrolls in the construction, retail trade, and other services industries.  Job gains in retail trade should continue to grow as new shopping centers are scheduled to open through the remainder of the year and into the first half of 2008.  Construction payrolls should remain steady as ongoing projects continue along with new projects that are scheduled to start in the year.  Other services can expect growth due to companies meeting the needs of local residents’ busy lifestyle.

 

 

Edison Labor Area

Review of 2007 and Outlook for 2008

Middlesex, Somerset, Monmouth and Ocean Counties

 

By Michael Dugan and Anntionette Blackston, Bureau of Labor Market Information

 

Total nonfarm employment in the Edison Labor Area reached a record high level of 1,032,500 during 2007, based on average employment for the January – September period. Increasing for the sixteenth consecutive year, payrolls in the labor area expanded by 7,200 or 0.7 percent when compared with 2006, rate of growth was slightly higher than the states (+0.5%). Since 1991, employment in the five-county labor area has increased by 243,100.

 

In the goods-producing sector, which saw jobholding decline by 1,400 over the year, manufacturing was the main culprit, accounting for 1,200 of the loss.  Factory employment continued to erode as Johnson Controls, a manufacturer of automotive batteries closed its location in New Brunswick and Ferrero USA, Inc., a maker of confectionary products in Somerset, reduced its workforce to consolidate operations to Branford, Connecticut.  Also, Eisai, a Tokyo-based pharmaceutical company, moved employees (-225 jobs) from their Bedminster (Somerset County) and Teaneck (Bergen County) locations and moved into a new building in Woodcliff Lakes (Bergen County).  Ward Products, a manufacturer of automobile antennas for Ford and Chrysler, closed at the end of December 2006 (-80 jobs). 

 

In the other goods-producing component, for the first time since the 2003-2004 period, construction employment declined (-200).  Construction payrolls moved lower mainly due to a slowdown in residential building activity.  Comparing August 2007 year-to-date (latest available) data with that of a year ago, new privately owned residential housing units authorized by building permits are considerably down in the Edison Labor Area (5,173 in 2006 vs. 4,195 in 2007) indicating the area is now experiencing the new residential construction slowdown that is being felt nationwide.  

 

Although residential housing units authorized in the Edison Labor Area are down about 19 percent from the same period a year ago, the area still maintains a significant portion of the statewide total.  Out of the 16,715 new, residential housing units authorized to be built in New Jersey through August, Ocean (1,298), Monmouth (1,238), Middlesex (1,028), and Somerset (631) counties account for over one quarter (25.1%) of the permits.  Many families are still moving to Ocean County, continuing its status as a desirable place to live, ranking it as number one in the state in single-family units authorized.  The estimates of resident population reveal that the four counties in the Edison Labor Area account for over 26 percent of New Jersey’s total population (July 2006, latest available).  This large population base of potential customers will continue to attract businesses to the area.

 

A further look at the local housing market indicates the Shore region’s housing prices have fared better than other parts of the state.  For instance, in the second quarter of 2007, the median price for an existing single-family home in Monmouth, Ocean, Middlesex and Somerset counties was $385,100, down 0.1 percent or $200 from the same quarter last year.  In comparison, the median price in an area that includes Essex, Hunterdon, Morris, Sussex and Union counties fell 6.4 percent.  Nationally, prices fell 1.5 percent, according to the National Association of Realtors.

 

In the service-providing sector, which advanced by 8,600, other services (+2,700), professional and business services (+2,300) and government (+1,600) accounted for the majority of the increase.

 

Payrolls in other services expanded due to meeting the needs of the area’s residents. Other services includes companies doing repair work or providing personal services as well as religious, professional, political, social and civic organizations.  Employment in other services rose primarily because of hiring in the personal services component such as hairstyling and nail salons.

 

In 2005 (latest data available), per capita personal income for the labor area was $44,297, an increase of 11.8 percent since 2000.  The area is also home to the second wealthiest county in the state, Somerset County, which had a 2005 per capita personal income of $61,039, ranking only behind Morris County’s $62,585.  Additionally, according to the Census Bureau’s 2006 American Community Survey, the Edison Metropolitan Division’s median household income was 110 percent of the state’s median household income ($71,253 vs. $64,470). Somerset County also ranked second statewide with a median household income of $91,288 for 2006.  An estimated 57 percent of the families in the area had a family income of $75,000 or more.

 

Providing a significant impact to the local economy was The Breeder’s Cup – the internationally known thoroughbred horse-racing event was held October 26th and 27th at Monmouth Park in Oceanport.  The second day is when the main event — the Breeders' Cup Classic, carrying a purse of $5 million — took place.  Over 80,000 fans came to Monmouth Park with nearly 27,000 on Friday and over 41,000 on Saturday.  Wagering at Monmouth on Saturday topped $12 million with worldwide wagering coming in at just over $112 million.  Breaking the state of New Jersey records for wagering which were set the previous day during Friday’s racing card.  Track officials say about $30 million was spent on renovations and catch-up maintenance dating back two years, geared to getting Monmouth Park ready to host the Breeders' Cup. The economic impact that horse-racing fans provided may top $60 million due to spending at area hotels, restaurants, convenience stores, movie theaters, car rental agencies and other businesses, according to racetrack and tourism officials.

 

Banks and retailers are also attracted to the area’s affluent residents.  For example, Yardville National Bank opened in Woodbridge (January, +20 jobs), Chase Bank (Franklin Park, February, +20 jobs), Hudson City (Old Bridge, June, +20 jobs) and Valley National Bank opened in Hillsborough (May, +15 jobs).  Negating some of those gains in the financial activities’ sector was a development that occurred during the first two months of this year: Wachovia Bank eliminated the retail credit sales support unit and transferred some of the positions to North Carolina and Alabama, laying off a total of 65 workers.

 

In retail trade, six arts and crafts Rag Shop stores closed in Monmouth and Ocean counties near the end of July (Wall, Middletown, Brick, Lakewood, Lanoka Harbor and Toms River).  Between 10-20 people worked at each location.  Despite showing a drop of 1,100 in retail, several notable developments occurred: Stop and Shop opened in Whiting (Manchester Township, Ocean County) with 100 employees in May 2007; at the Heritage Square Shopping Center in South Brunswick, Staples opened (+50 jobs) and in July, Best Buy (+100) and Target (+90) opened.

 

Additionally, The Shoppes at Old Bridge began opening some of its doors in early May 2007.  The remaining stores opened later with over 300 workers.  Retailers include Ann Taylor Loft, Chico’s, Coldwater Creek, New York & Company, White House/Black Market, Children’s Place, Gap Kids/Baby Gap, Banana Republic, Gap/Gap Body, Aerosoles, Clarks/Bostonian, Yankee Candle and Corbo Jewelers.  Located on the site and expanding the area’s leisure and hospitality payrolls are eateries Salaritas, Bensi, and Maggie Moo’s.

 

In leisure and hospitality, which increased payrolls by 900 over the period, the Heldrich Hotel and Conference Center opened in March in New Brunswick with 300 employees and a Gold’s Gym opened (May, +75 jobs) in Old Bridge.  Old Man Rafferty's opened an eating and drinking establishment at the end of August in Asbury Park.  About 60 people were hired.

 

The outlook for the Edison Labor Area remains positive in the immediate future due to its well-balanced industry composition, population growth and state-leading, albeit slowing, housing market.  Due to its sheer size, the area’s employment growth should continue to remain in line with expansion by the state.

 

Despite leisure and hospitality and retail trade’s high turnover in employment, these sectors should see a boost in employment as the “outdoor lifestyle center” addition at Freehold Raceway Mall opened in early November 2007.  Tenants in the new center include P.F. Chang’s China Bistro, Borders Books, Ann Taylor, Chico’s, Coldwater Creek, White House Black Market, Territory Ahead and Jared the Galleria of Jewelry.  The Cheesecake Factory opened in the mall’s expansion in October, adding about 100 jobs.  Additionally, the lifestyle center, The Shoppes at North Brunswick, is forecast to open in the fall of 2007.  It will have over 30 upscale retailers and five eating places.  Also, Houlihan’s Route 35 location in Eatontown opened in October 2007. 

 

There was an October groundbreaking for a new development project - the Jersey Shore Premium Outlets in Tinton Falls.  The 435,000-sq. ft. outlet center will offer an upscale outlet shopping experience.  The center will be a single-level, village-style project and will be Chelsea Property Group’s third Premium Outlet Center in New Jersey, joining Liberty Village Premium Outlets in Flemington (Hunterdon County) and Jackson Premium Outlets (Ocean County).  It will feature 120 stores and is scheduled to open fall of 2008 with approximately 800 to 1,000 jobs being created and is projected to generate an estimated $170 million in retail sales.

 

In the financial activities’ sector, Foxtons Realtors, the West Long Branch-based discount broker which promoted itself as "the home of the 2 percent real estate commission," stated in late September that it will lay off 350 of its 380 remaining employees and planned to file for bankruptcy protection, mainly due to the weak housing market.

 

In a growing trend over the last 20 years, hospitals have been moving towards offering services that go beyond the traditional use of hospitals.  Of the 80 full-service hospitals in the state, more than a dozen have their own fitness or wellness centers.  Health and education employment in the area should benefit from this trend. In October, CentraState Healthcare System opened a $48 million, 171,000-sq. ft. ambulatory campus in Freehold. 

 

Additionally, since last year, Jersey Shore University Medical Center (Neptune) has been working on a $300 million project which is estimated to be completed in 2009.  It includes a 360,000-sq. ft. addition, 82,000-sq. ft. renovation and a 975-car parking garage.

 

Aiding construction in the near-term and health and education on the horizon is the start of a world-class stem cell research facility.  The $150 million, 18-story tower is to be built in downtown New Brunswick next to Robert Wood Johnson University Hospital, near Rutgers University, several other schools and hospitals and the Cancer Institute of New Jersey.  The building is to have facilities for research, clinical study and outpatient treatment and is expected to be completed in spring 2011. 

 

In another development aiding construction employment initially and ultimately transportation and warehousing, the Portfield’s Initiative is a project of the Port Authority of New York & New Jersey and the New Jersey Economic Development Authority.  It is designed to help private developers, communities and others transform underutilized and brownfield sites into productive properties to support emerging market opportunities for ocean and air freight-related warehousing and distribution operations.

 

One of the major Portfield’s Initiative projects currently under construction is the iPort12 International Trade & Logistic Center.  The project, which is on a former brownfield site, is a two building $100 million project which is situated on 113 acres in Carteret off Interchange 12 on the New Jersey Turnpike.  This project hopes to attract tenants requiring a minimum space of 100,000-sq. ft. and up.  Currently, there are no tenants but food and beverage businesses have expressed interest.  Highway upgrades are to be done at Interchange 13 to expand toll booths from seven to 14.  Other sites under consideration for development: Port 440 and Chevron in Perth Amboy; Nuodex in Woodbridge; Middlesex Logistics Center in Edison and Port Reading Business Park in Carteret.

 

The biggest news for the area is the slated closing of Fort Monmouth.  Congress authorized the Pentagon to begin shutting down Fort Monmouth while expanding Picatinny Arsenal which is situated on a 6,500-acre military installation located in Morris County and merging McGuire Air Force Base, Lakehurst Naval Air Engineering Station and Fort Dix into a megabase.  Fort Monmouth — which employs more than 5,000, supports an estimated 22,000 more jobs and generates about $3.3 billion for the state's economy — is to be closed as a result of the 2005 Base Realignment and Closure round.  The bulk of its functions are to be transferred to Maryland's Aberdeen Proving Ground by 2011.

 

One specific development that indicates the area is now experiencing the sinking real estate market felt nationwide: Belmar (Monmouth County) was planning its most ambitious proposal - a $500 million project to essentially raze and rebuild most of its downtown.  Recently though, this initiative has run into difficulty, as the municipality terminated the contract of its master developer due to the developer’s decision to back out of a key agreement on the first phase of the redevelopment project.

 

The developer and the owners of the respective site could not reach a deal to develop a 3-story complex of condominiums and townhouses along with 9,500-sq. ft. of retail space.  Besides the weakening housing market, other factors affecting Belmar’s efforts were the nation’s “credit crunch” and the state courts’ tighter definition of “blight” to prevent municipalities from abusing eminent domain in order to force unwilling residents and business owners from their properties, according to local officials.

 

The Edison Area’s unemployment rate can be expected to remain below that of the state in the coming year.  In 2007, the nine-month average unemployment rate for the labor area was 4.0 percent and improved from its 2006 level (4.5%).  In comparison, New Jersey’s average nine-month rate improved by moving from 4.9 to 4.4 percent, from 2006 to 2007.

 

For more information on Middlesex and Somerset counties, please contact Anntionette Blackston by e-mail at Anntionette.Blackston@dol.state.nj.us or call (609) 292-2572.

 

For more information on Monmouth and Ocean counties, please contact Michael Dugan by e-mail at Michael.Dugan@dol.state.nj.us or call (609) 633-6425.

 

 

Trenton-Ewing Labor Area

Review of 2007 and Outlook for 2008

Mercer County

 

By JoAnne Caramelo, Bureau of Labor Market Information

 

In 2007, total nonfarm employment in the Trenton-Ewing Labor Area advanced for the eleventh consecutive year as local employers added 4,500 jobs to their payrolls, based on average employment for the first nine-months of the year (January to September).  The 1.9 percent rate of growth brought employment in the labor area to a record high of 246,200 and was nearly four times the rate of growth realized statewide (0.5%) in 2007.  Since 1996, the start of the Trenton-Ewing Labor Area’s eleven-year growth cycle, area jobholding has increased by 53,100 or 27.5 percent.

 

With a payroll increase of 900, professional and business services was the private sector job growth leader over the first nine months of 2007.  Gains attributable to hiring in the professional, scientific and technical services component served as the catalyst to this sector’s growth. Area employment advanced by 6.1 percent, a rate more than twice that of the state (2.6%).  Central New Jersey, which has often been referred to as the nation’s medicine chest, has a large concentration of pharmaceutical companies, and companies that provide them with various research and development services have added to payrolls. Other professional and business services firms that realized job growth were those that provide specialized computer services, and architectural and engineering firms.  The labor area’s strong corporate climate makes it a prime market for office space and some of the newly-constructed office space throughout the labor area has been absorbed by growing companies like the ones mentioned above moving into larger spaces. 

 

Growth by clean technology companies has also benefited payrolls in professional and business services.  Research in clean technology, or alternative energy sources, recycling practices, and energy efficiency, is a growing field, and firms in the Trenton-Ewing Labor Area are making important contributions in this area.  EPV Solar (Lawrence) is developing more efficient and affordable solar technology.  Ocean Power Technologies (Pennington), a renewable energy company, has contracts with the U.S. Navy and the Spanish government for its wave power technology services. BlackLight Power (East Windsor) invented hydrogen-based alternative energy and light sources.  According to a study from CleanTech Network, New Jersey ranks 5th in the U.S. in encouraging the growth of clean technology startup companies.  Nationally, in the second quarter of 2007, total venture capital investments in clean technology increased 46 percent from the prior quarter according to The MoneyTree Report by PricewaterhouseCoopers and the National Venture Capital Association based on data from Thompson Financial.

 

Leisure and hospitality payrolls added 800 jobs since last year.  Chain restaurants opened in or near the area’s many shopping centers.  However, the labor area’s diners have more new options besides national chains like PF Chang’s China Bistro in West Windsor and Camille’s Café in Lawrence.  Several independent restaurants like 130 South in Hamilton and Barone’s Tuscany Grill in Pennington opened throughout the area.  Also, several full-service eateries specializing in various ethnic foods moved into long vacant storefronts in downtown Trenton. 

 

Between 2006 and 2007 jobholding in trade, transportation, and utilities increased by 400.  Positive developments in transportation and warehousing include McMaster Carr’s relocation of their Dayton (Middlesex County) distribution center to Washington Towndhip at the end of 2006.  Although Comair, a subsidiary of Delta Airlines, stopped service from the Trenton-Ewing Airport, payrolls were unaffected as Big Sky Airlines, another Delta subsidiary, took over their flight routes.  Retail openings throughout the Trenton-Ewing Labor Area also contributed to the sector’s job gain.  They include an Old Navy and Walgreen’s in Hamilton, Filene’s Basement in Lawrence, Fresh Fig natural foods market in Pennington, and Foot Locker in Trenton. Although retailers like Rockaway Bedding, Rag Shop and Comp USA closed all locations statewide due to bankruptcy or restructuring, these merchants had a small area presence so there was minimal effect on payrolls.

 

Employment in educational and health services increased by 300 during the 2006-2007 period.  In health care and social assistance, the hiring of workers to staff Robert Wood Johnson University Hospital Hamilton’s new tower expansion contributed to job creation.  In educational services, Princeton University’s campus is undergoing a transformation. Whitman College, a new residential college, opened for the fall 2007 semester.  Named for eBay.com CEO and Princeton alumnae Meg Whitman, who made a significant financial contribution to the project, Whitman College is the university’s 6th residential college.  The 10 buildings include dormitories, a dining hall, drama theater, library, and classroom space.  This new residential college will help the university meet its goal of expanding the student body from 4,700 to 5,200 by the fall 2012 semester.  An $8.4 million soccer stadium and new science library are due to open in 2008.  Outdated dormitories from the 1960s were razed in the summer of 2007 and are being replaced with modern facilities projected to be completed for the fall 2009 semester.  The university recently received planning board approval for the construction of a new chemistry building and a 300-foot pedestrian bridge over Washington Road.  In 2006, the university celebrated its 250th anniversary in Princeton.

 

In financial activities, the opening of several bank branches helped payrolls in the Trenton-Ewing Labor Area add 100 jobs.  The Bank of Princeton and First Choice Bank, two of 19 new banks to open in New Jersey within the last two years, opened in the labor area in 2007.  Many of these banks have been formed by members of the business community who perceive a need for more personalized service to small businesses and individuals that they feel is not met by large national banking institutions.  The state’s high per capita personal income makes it a desirable market for banks, and the number of bank choices benefits consumers as institutions compete with each other to offer the best terms to customers.  This is evident in the Trenton-Ewing Labor Area, where according to 2006 FDIC figures, there were 25 institutions operating within the market, and Mercer County was New Jersey’s 9th largest market by total deposits.  In just five years since 2001, Mercer’s total deposits grew by 53 percent. 

 

After reaching a record high in 2006, Trenton-Ewing Labor Area’s construction employment was down 100 jobs or 1.6 percent over the first nine months of 2007.    Analysis of Mercer County’s August-to-date residential building permits (latest data available) reveals a 47.7 percent decline from 2006 to 2007, which is sharper than the statewide decline (29.5%) and is an indicator that construction job cuts could be due to a slowdown in the housing market.  However, construction on large commercial projects like the PrincetonSouth Corporate Center being built in Ewing and warehouse development in Washington Township have helped make the percent of decline in area construction jobs relatively small.

 

Jobholding in the Trenton-Ewing Labor Area should continue to expand near its current rate through the reminder of 2007 and into 2008, with professional and business services continuing to be an important job generator for the area.  Payrolls in the professional, scientific and technical services component should continue to benefit from the region’s significance in the pharmaceutical and biotechnology fields.  Total Learning Concepts, which offers sales training for those industries, recently announced plans to relocate jobs from Massachusetts to the labor area.  In the long term, several office parks catering to biotechnology companies are under development.  Site work is underway at SciPark, a four-building campus in East Windsor Township, and construction is due to begin in 2008.  The Genesis Biotechnology Campus, a 410,000-sq-ft office development with capacity for 500 to 700 workers is planned for Hamilton Township.  Humigen, a company specializing in genetic immunology and is a spin-off of Medical Diagnostic Laboratories, is expected to occupy 40,000-sq-ft by the first quarter of 2009. 

 

The concentration of technology-oriented companies, availability of highly-skilled labor, location of research institutions like Princeton University, and the major advances in sciences and technology that have historically and continue to be made by area firms have led to a marketing initiative aimed at promoting job growth.  Dubbed Einstein’s Alley, this initiative was spearheaded by Congressman Rush Holt as a strategy to promote economic growth of high-tech industries in Central Jersey.  His vision was for the area to have recognition along the lines of California’s Silicone Valley.  The name Einstein’s Alley capitalizes on the significance of the area with regard to scientific discovery and innovation both past and present.  Recently, a new privately funded nonprofit corporation adopted the name Einstein’s Alley and has made attracting, building, and retaining technology-based businesses in Central New Jersey their mission.  Although it has no set geographic boundaries, the Einstein’s Alley Corridor is roughly the area from Edison in Middlesex County to Trenton and from New Jersey’s eastern to western borders.  The name is beginning to catch on.  In the Trenton-Ewing Labor Area, Hamilton and East Windsor have already designated themselves as part of Einstein’s Alley, and Trenton, Lawrence, and Ewing plan to follow suit.     

 

In information, payrolls should benefit from Computer Associates International’s move to Ewing. The company plans to consolidate operations from Pennsylvania and New Jersey and bring 400 jobs to the newly-constructed PrincetonSouth Corporate Center this fall.

 

In financial activities, more bank openings are planned.  Cranford-based Synergy Bank is opening a location in East Windsor.  The newly-formed Bank of Princeton recently received approval from the New Jersey Department of Banking and Insurance to open two additional locations.  It is unclear if recent bank mergers will affect area payrolls.  Some administrative jobs may be lost as a result of the merger of Yardville National Bank and PNC Bank, although no branch closings are planned. Commerce Bank is being acquired by TD Bank Financial, a Canadian banking group, which does not have a presence in the Trenton-Ewing Labor Area.  The recent sale of Merrill Lynch’s property in Plainsboro (Middlesex County) should have a positive effect on payrolls in the labor area as the company plans to relocate some workers to its Hopewell site. 

 

Employment in trade, transportation and utilities should also see positive growth in 2007.  In retail trade, The Shoppes at Hamilton, a 50-tenant lifestyle center, is under development along Route 130 and due to open at the end of 2008.  New retail space is also one component of the redevelopment plans for sites in downtown Trenton; including a major redevelopment of Trenton’s train station, the recently renovated Broad Street Bank building, and a site along Warren Street dating from the 1800s which was originally occupied by a tavern.  In transportation and warehousing, additional distribution centers are under development in Washington Township.

 

Positive developments in leisure and hospitality include the opening of hotels, restaurants and fitness centers.  A Hilton Garden Inn opened in October in Hamilton, and will soon be followed by the opening of an Outback Steakhouse and TGI Friday’s.  Several restaurants are also due to open at the Washington Town Center, and the newly-constructed Windsor Crossing shopping center in East Windsor.  A Work-Out World gym is also under construction in Washington, and a Gold’s Gym is planned for East Windsor. 

 

In the short term, the large decline in Mercer County’s residential building permits could be indicative of slow job growth in construction.  However, payrolls could be positively impacted in the long run if commercial and residential projects like additional corporate, retail, and restaurant space at PrincetonSouth Corporate Center, Capital Health System’s new hospital in Hopewell, a major expansion of Quakerbridge Mall, loft and condominium projects proposed for vacant industrial sites in Trenton, and proposed transit villages in Trenton, West Windsor, and Hamilton, move forward.   

 

For more information on the Trenton Labor Area, please contact JoAnne Caramelo by email at Joanne.Caramelo@dol.state.nj.us or call (609) 633-0553.