Chamber survey 54 percent of respondents fought recession with layoffs

//October 2, 2009//

Chamber survey 54 percent of respondents fought recession with layoffs

//October 2, 2009//

Listen to this article

Vast majority hopeful their companies will be in better shape in 12 months.Dennis Bone, president of Verizon New Jersey and chairman of the state Chamber of Commerce, told an economic forum in New Brunswick Friday morning that a new survey of member firms found 86 percent have taken steps to cut costs, including layoffs and pay cuts, and that 83 percent are either “reasonably confident” or “extremely confident” that their companies will be in better shape a year from now.

“I would call the business community fragile — bottom-line profitability is a huge issue,” Bone said in remarks to an economic conference at the Edward J. Bloustein School of Planning and Public Policy at Rutgers University.

The survey went out to 1,100 businesses in September, with 107 responding. In a comments section, companies said they are concerned the $8 billion budget gap being forecast for the 2011 state budget may be closed “on the backs of the business community,” Bone said.

Fifty-four percent of responders said they turned to layoffs to keep expenses in order, while 23.4 percent used pay cuts and 49 percent froze pay at their companies.

The conference also heard from Jim Hughes, Bloustein dean; Pat O’Keefe, director of economic research at J.H. Cohn, the Roseland accounting and consulting firm; and Rae Rosen, senior economist at the Federal Reserve Bank of New York.

O’Keefe said New Jersey’s personal income and employment will be flat in the first half of next year, with employment recovering in the second half. He expects to see an increase in home resale prices in the first half of next year, while new-home building remains flat at historically low levels.

Rosen said output has bottomed out in New York and is increasing, and New Jersey will soon follow — but she said there will be a significant time lag before jobs begin to grow. Businesses have cut workers’ hours dramatically to avoid layoffs, and will return to a more normal work week before they start hiring.

She said a group of economic surveys she monitors are forecasting “unemployment rising into next year and then coming down very slowly, so we might still be in the 9 percent range in 2011.”

Hughes, looking at the national economy, said, “Clearly, 2009 will be the worst employment loss record since statistics were first kept in 1939.” But he said monthly job losses have decelerated “from falling off the cliff to simply sliding down the mountain.”

The current decade will likely be the first since the Great Depression where the nation will end with fewer private sector jobs than when it began, Hughes said.

“This recessing really is different,” Hughes said. “We have just been through the most formidable manmade financial calamity in modern experience. The financial world is still in intensive care, and the credit crisis is still a long way form being put to bed, particularly in regard to small-business lending.”

E-mail Beth Fitzgerald at [email protected]