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Economic Development

Economic Growth in South Jersey

Business leaders report early job gains in important industries, but also say increasing costs and funding needs could slow the region’s momentum.

Southern New Jersey’s economy continues to show resilience despite Ørsted’s cancellation of its Ocean Wind 1 and Ocean Wind 2 projects, with business leaders reporting job gains early this year in several of the region’s mainstay industries.

Economics professor Oliver Cooke, editor of Stockton University’s South Jersey Economic Review, notes that employment data through the first quarter of the year showed the Atlantic City metropolitan area economy expanding at a brisk 4.8% year-on-year pace. “Importantly, this year’s early job gains have been broad-based with retail trade, casino hotels, restaurants and bars, professional and business services, and health and educational services all recording solid year-on-year job gains,” Cooke says in the review.

Disappointment and Potential of Wind Power

Ørsted’s cancellation of its projects, which were projected to generate thousands of jobs and pump millions of dollars into the region’s economy, was disappointing but not terminal for the region’s renewable energy hopes.

“Most in the region feel confident that the work that has been done to date will not be for naught,” according to Chamber of Commerce Southern New Jersey President and CEO Christina Renna, who notes continued support of clean energy from Gov. Phil Murphy and the Biden administration. “The state – and specifically the South Jersey region – remains perfectly poised to bring the wind industry – and most importantly the jobs that come with it – to our backyard.”

Joris Veldhoven, CEO of Atlantic Shores Offshore Wind, which is building at its NJ Wind Port next to the Salem Nuclear Power Plant on the Delaware Bay and putting windmills off the Atlantic Coast, says the state has the potential to lead the way in clean energy development.

“Bringing a new industry into the state doesn’t come without challenges and 2023 was certainly a bump in the road in what will be a viable long-term economic driver for New Jersey,” Veldhoven says. “Atlantic Shores Project 1 will contribute nearly $2 billion to the New Jersey economy and create thousands of local, family-sustaining jobs.”

Healthcare Sector a Regional Driver

Healthcare and life sciences have a significant presence in South Jersey, with development in 2023 at hospitals, medical research facilities, and pharmaceutical companies contributing to employment growth.

“Construction is underway for the Rowan College of South Jersey Allied Health Center on the RCSJ-Cumberland Campus. This is a $10 million project that will house Rowan Medicine Clinics in Pain Management: Neuro-Musculoskeletal Institute, Rowan Integrated Special Needs, Family Practice, and Behavioral Science,” Southern New Jersey Development Council President Marlene Asselta notes. “The facility will also house CARES: Child Abuse Research Education & Service when it opens in early 2024.”

In addition, AtlantiCare Regional Medical Center Mainland Campus, in Pomona, is planning a $75 million expansion; Cooper University Health Care and MD Anderson Cancer Center is undergoing $2 billion worth of expansion in the City of Camden; and Jefferson Washington Township Hospital’s new Silvestri Tower has opened – the last phase of a three-year, $222 million revitalization.

Manufacturing and Transportation Contributing to Growth

With a history of manufacturing activity in areas including food processing and aerospace, Asselta notes the region’s manufacturing base is diversifying. One example: Affiliates of Agronomed Capital, including Agri-Kind NJ, which plans a 125,000-square-foot cultivation and manufacturing facility in the Atlantic City Green Zone.

“Manufacturing jobs remain consistent in the region, although statewide they have taken a slight dip of late,” Asselta says. “Engineering and construction will likely stay robust due to infrastructure and housing needs in the region. There’s a strong need for funding in most industries to acquire more equipment or supplies to stay competitive.”

South Jersey’s clean energy initiatives will help drive the region’s manufacturing sectors. “The offshore wind industry will bring in all kinds of union jobs in manufacturing, transportation, construction, engineering, and operations and maintenance positions,” Veldhoven says. “Offshore wind development creates jobs across all sectors for various types of workers.”

Government investments in infrastructure and transportation networks should increase demand for industrial spaces with expansions including the Direct Connect Project linking I-295, I-76 and Route 42 and the expansion of the Glassboro-Camden Light Rail. Two phases of the complex I-295 Direct Connection project are complete and the third phase, which includes the construction of four bridges, is underway.

Shifting Real Estate Demands

The region is still experiencing demand for residential real estate left over from in-migration of people from Philadelphia during the COVID-19 pandemic, although demand for office space is down.

“There is somewhat of a new trend to turn office spaces into housing/residential options,” Renna says. “Also, depending on where vacant offices are located, there is some talk of empty office-to-industrial use possibly on the horizon. If empty office spaces are near main transportation arteries, it could be very attractive for certain industries looking to relocate or expand to give empty properties a hard look.”

Then There’s Tourism

Investment in Atlantic City last year included the Showboat Hotel’s recently opened $100 million waterpark, Caesars Entertainment opening the Nobu Hotel Tower and Nobu Restaurant, and new dining concepts and enhancements at the Tropicana and the Waterfront Conference Center at Harrah’s. The Borgata Hotel Casino and Spa rebranded the MGM Tower at Borgata.

“The destination will be hosting several new conventions in 2024, with emerging new market segments including cannabis and wind energy industries,” according to Visit Atlantic City President and CEO Larry Sieg. “The year (2023) is on pace to surpass 2019 numbers with a significant increase in exhibitor and delegate attendance at most of the annual tradeshows and conventions at the Atlantic City Convention Center and at the partner hotel properties.”

Numerous expansions, including eight new or renovated hotel properties, are underway in the Wildwoods – on and off the popular boardwalk. Seaport Suites, a four-story, mixed-used hotel with 63 modern units, opened last summer in downtown Wildwood. A new boardwalk resort, The Wild Resort – to be located at Glenwood Avenue – is slated to open in 2025 with boardwalk retail and a second-floor restaurant and pool. The boardwalk also is getting a facelift, with two out of five phases to replace or resurface it mostly completed.

Chamber of Commerce Southern New Jersey’s Renna says the region’s expansion is being slowed by rising costs that are slowing growth and activity. “Still, there is an overall sense of optimism in South Jersey heading into the new year,” she says, adding that 73% of respondents to a recent chamber survey say they plan to hire new employees in 2024.

To access more business news, visit NJB News Now.

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