By Kyle Sullender, Executive Director of Focus NJ May 31, 2022
After a year of record unemployment, rapid swings in GDP and spikes in personal income driven by unprecedented stimulus measures, stability has finally returned to New Jersey’s economic indicators in 2021. Measures of fiscal health and well States have lagged pre-pandemic levels in many cases, but avoided the extremes of the first year of the pandemic.
GDP per quarter: New Jersey’s GDP fluctuated dramatically during the first months of the COVID-19 pandemic in 2020. From the first to the second quarter of 2020, Garden State’s GDP fell 38.9%, only to rebound 39.5 % in the third quarter.
The state’s GDP growth in 2021 has been much more stable. In the first quarter, GDP increased 7.5% from the previous quarter and totaled $649.3 billion in current dollars. Growth was slower in Q2 at 2.2% and followed the national growth rate of 6.7% before recovering slightly in Q3 (3.8%) and Q4 (7.4%).
According to the Bureau of Economic Analysis, New Jersey ended 2021 with an annualized growth rate of 4.9% over the previous year.
Industry Contributions: In 2021, New Jersey’s largest industry as a percentage of total GDP was finance, insurance, real estate, and leasing. The industry’s total GDP was $150.7 billion in 2021 and accounted for approximately 22% of New Jersey’s GDP.
In terms of contribution to state GDP, professional and business services was the second largest segment (16.6%), followed by government and public enterprises (9.9%), manufacturing (9.5 %) and education, health care and social assistance services (9.2%).
Small business and consumer spending: Since the start of the pandemic, Harvard University’s Opportunity Insights Economic Tracker has attempted to quantify the impact of the pandemic on states, small businesses and consumers.
According to the Economic Tracker, the number of small businesses open in New Jersey was 8.8% lower at the end of 2021 (the week ending December 26, 2021) compared to January 2020. Interestingly, revenue from small businesses measured over the same period grew 31.5%.
The conflicting results appear to suggest an uneven recovery for New Jersey’s small businesses, one in which many were forced to close while others were able to capitalize on consumer spending that remained 34.4% higher at the end of December than before. the pandemic
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