Growth will be at 'snail's pace'

By Russ Flanagan

Herald Staff Writer

From New Jersey Herald - http://www.njherald.com/newss/Growthwi.htm
July 26, 2001 - Sussex County, NJ

The state's economy is expected to grow at a "snail's pace" over the next few years, and that slow growth is likely to be mirrored on the county level, officials said.

After experiencing a rapid growth in employment over the last four years, the state's economy will continue to slow down this year and even more in 2002, according to an economic forecast released by the Rutgers Economic Advisory Service. However, the slow down is not expected to erode into a full-blown recession.

"I don't think the economy will go into a full recession," said Dr. Nancy Mantell, director of the advisory service. "What the forecast is for is for very slow growth."

That same slow but steady growth is expected to continue in Sussex County as well, according to Tammie Horsfield, president of the Sussex County Economic Develop-ment Partnership.

"I expect the same," she said. "(The economy) is cautious but there is still room for growth, just at a much slower pace."

That slow growth will be directly reflected in the number of new jobs created over the next few years. Mantell predicts that only about 40,000 new jobs will be created in 2001 and 2002 combined, however, those numbers are expected to return to the averages seen in the 1990s after next year. Mantell expects the job base will get a boost in 2003 and beyond when an average of 42,000 new jobs will be added each year.

However, the state's job base will grow too slowly over the next two years to pull the unemployment rate back down to the 3.8 percent experienced in 2000. The unemployment rate is expected to climb to 4.3 percent this year and average 4.9 percent from 2002 to 2006. Those numbers will still be far below the 8.5 percent unemployment rate in recession-stricken 1992.

The study also found that over the forecast period, both the construction and manufacturing industries will lose jobs. Conversely, the service sector -- comprised of cashiers, gas station attendants and similar positions -- will account for 64 percent of the increase in private and public employment in New Jersey, while the financial sector makes up 18 percent and trade jobs nine percent.

Sussex County's service sector is expected to see similar growth.

"A lot of service industries will grow," Horsfield said. "I think that is fair (to say)."

The forecast predicts that by 2006, the service sector will provide 35 percent of the state's jobs, up from 27 percent in 1990 and 33 percent in 2000, while only 10 percent of the state's jobs will be in manufacturing.

About 25 percent of those service jobs will be in business service, such as computer programming, but will mark a smaller increase than in the 1990s, when business services was "the major driver" in most of the economic growth. In addition to business services, other industries expected to see major growth in the next few years are hotels, non-bank finance and transportation.

The forecast is compiled using a large-scale economic model, information from providers for the national forecast, conversations with business leaders and tireless analysis, Mantell said.