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Report: N.J. businesses reluctant to expand, start new business

| Nov 28, 2011 | Business Formation |

Today is Cyber Monday, purportedly the biggest online shopping day of the year. It’s a day for boosting retailer confidence and projections for the coming year. But a recent study demonstrates that business owners still lack confidence in an economy that is desperately struggling to recover.

The report by the New Jersey Business and Industry Association projects small gains in sales, profits and spending, but employment prospects are still weak. Only 15 percent of businesses are planning to hire more employees in 2012, and 13 percent are planning to make cuts, the survey said. About 71 percent plan to keep employment the same.

The stagnant employment projections aren’t exactly surprising. For the fourth year in a row, more companies reported decreases in sales, profits, spending and unemployment than increases, the Times of Trenton reported. About 32 percent of companies expect business to decline over the next six months, while one-fourth expect things to improve.

Nevertheless, business owners have growing confidence in New Jersey. Some 18 percent said the state is a good place to expand their facilities or build new ones, an improvement over the last several years. And 54 percent gave the state a fair or average rating for business expansion.

A spokesman for NJBIA said the more favorable outlook is likely due to business-friendly efforts by the New Jersey Legislature and Gov. Chris Christie. The governor has pledged to drive down taxes and improve the state’s budget, according to the Times.

The outlook does hold some hope for prospective business owners. Plus, consumer confidence can always influence business formation. Last year’s Cyber Monday was the biggest day of online spending ever, and if early projections that today will top last year prove correct, perhaps more entrepreneurs will be confident enough to jump in the pool, and existing business owners will expand.

Source: The Times of Trenton, “N.J. businesses still reluctant to expand, hire,” Carmen Cusido, Nov. 26, 2011

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