New Jersey’s Hidden Economic Strengths

February 26th, 2008 by Tim Evans

New Jersey ranks first in the nation in per-capita sales and receipts for business establishments in the wholesale trade sector. It also ranks first in the warehousing and storage industry, an important support industry to wholesaling.
Per-capita receipts in the transit and ground passenger transportation industry were higher in New Jersey than in any other state, including in the sub-industry of urban transit systems.
New Jersey ranks fourth, behind Delaware, North Carolina and Pennsylvania in pharmaceutical and medicine manufacturing, and tenth in basic chemical manufacturing, where Louisiana and Texas take the top spots.
In professional, scientific and technical services, New Jersey ranks seventh; Massachusetts and Virginia lead. In scientific research and development services, a sub-industry of professional, scientific and technical services, New Jersey ranks eleventh; Massachusetts and Maryland lead.

Source: 2002 Economic Census

Moving People and Goods is Big Business

The Census Bureau recently unveiled a new tool for exploring data from the 2002 Economic Census. This tool allows the user to select a state and see in which industries (as defined by the North American Industry Classification System or NAICS) the state leads the nation in terms of per-capita receipts.

Surprisingly, New Jersey does not lead the country in per-capita receipts for several industries often closely associated with the state, including pharmaceutical and medicine manufacturing as well as scientific and technical services.

Instead, New Jersey is a specialist in the movement and distribution of goods, and in the large-scale movement of people—perhaps natural niches for the nation’s most densely populated state. The Garden State tops the nation in per-capita receipts for the entire wholesale trade sector of the economy, as well as for numerous sub-industries in this sector, and for several sub-industries in the transportation and warehousing sector, including both passenger and freight.

The high showings in wholesale and goods movement are consistent with northern New Jersey’s inclusion in the nation’s most populous metropolitan area and its hosting of the country’s third-busiest port. NJ Transit’s rank as the country’s largest statewide transit system probably explains the state’s top spot in the urban transit industry. Moving people and stuff is big business in New Jersey.

Given this specialization, it is important that we carefully consider investments in transportation infrastructure and play to our strengths. In terms of goods movement, emphasis is rightly placed on the port as an economic engine; however, where opportunities to increase capacity arise, we must be sure to consider strategies aimed at diverting more freight to rail.

Similarly, we must consider more transportation alternatives to get commuters onto public transportation. New Jerseyans clearly demonstrate a willingness to ride transit where it is available and convenient – seventy percent of New Jerseyans who work in Manhattan commute by transit and about a quarter (24 percent) of New Jerseyans working in Philadelphia use transit to get to work. (Source: NJ Transit analysis of 2000 Census data)

Additionally, the low rate of intra-state transit commuting—only 5 percent of people who work in New Jersey commute by transit, which is no better than the national average—points to an untapped resource at the state’s disposal. If New Jersey were to make a concerted effort to encourage transit-oriented employment centers within its own borders, it could potentially alleviate the need for widening roads that primarily serve intrastate travel.

If you have any questions about this issue of Future Facts, please contact Tim Evans, Research Director.