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The basics:

• NJBIA‘s annual Business Outlook Survey cites rising energy costs, tariffs as top challenges for New Jersey businesses
• 77% reported declining business affordability in past 5 years
• Staffing shortages, profit declines, high operating costs continue to strain small businesses
• Most respondents view New Jersey as less competitive than other states in taxes, regulation and business climate

The New Jersey Business & Industry Association‘s 67th Annual Business Outlook Survey is out Dec. 8, finding increased energy costs and tariffs are top of mind for New Jersey businesses.

The report is based on 569 responses to the survey, conducted by Signet Research. The questionnaire was sent to New Jersey business owners and executive staff in September and October. The majority of responses were from small businesses, with 65% employing 24 or fewer people.

The top challenges cited by respondents were tariffs at the national level – along with increased energy costs in New Jersey, which businesses describe as a strong and largely unexpected deterrent to profits.

In fact, 77% said business affordability has declined over the past five years. Additionally, 81% feel that lawmakers have not done enough to address business affordability over the past 12 months. Notably, 78% said New Jersey is worse than other states in controlling energy costs, which is a dramatic jump from the 53% who felt that in last year’s survey.

Just 10% of respondents feel the state has made progress over the last year in easing regulatory obstacles.

“We say it often that businesses need predictability, and some did not see those challenges coming as it relates to energy costs, in particular,” said Michele Siekerka, president and CEO of the NJBIA. “These results show a great need for more pro-business policy amid declining profits and expectations.”

Front and center

The survey examined a number of business and economic areas. Key findings include:

Energy costs

• • 77% of respondents were substantially (32%) or moderately (45%) impacted by increased energy costs this year
  • Of that number, 37% needed to raise prices to meet the rising costs
  • 81% were somewhat unconfident (35%) or not confident at all (46%) those high expenses would moderate in 2026

Tariffs

• • 49% said tariffs impacted their supply chains in 2025
  • Of those impacted, 88% faced increased prices from supply chains; also of those impacted, 36% sourced products from different suppliers and 23% reduced or lowered the quality of inventory
  • 81% are not confident at all (63%) or somewhat unconfident (18%) that they could absorb those raised input prices without passing them on to consumers
  • 45% said they had already changed or planned to make changes to their supply chain strategy

Staffing

• • 49% said they were challenged finding staff in 2025 (versus 55% in each of the two previous surveys)
  • Of those challenged, 74% said there were not enough candidates or applicants to fill open positions; while 59% said candidates lacked the required skills or qualifications

Employment

• • 17% increased hiring in 2025 (down from 20% in 2024 and 23% in 2023); while 19% decreased hiring
  • 24% predicted an increase in employment for 2026, versus 12% who predicted less hiring (12% net positive hiring outlook); 64% said they’ll stay about the same

Profits

• • 30% reported profits for the year, while for the second straight year, 45% reported a loss
  • 36% believe they will make a profit in 2026, compared with 28% who anticipate losing money (8% net positive – a drop from 15% net positive heading into 2025)

Sales

• • For a second straight year, 39% said sales increased; of those, nearly 12% had an increase in sales between 1%–3%
  • 46% project a sales increase in 2026 (a slight decrease from 48% in last year’s survey) – compared with 22% who foresee less sales in 2026 (for a +24% net positive forecast)

Wages

• • 17% increased pay for employees by 5% or more in 2025 (down 10% from last year and 17% from two years ago)
  • In total, 68% increased wages in 2025 (down from 77% in 2024)
  • 10% say they’ll increase wages by more than 5% in 2026

New Jersey challenges

• • Overall cost of doing business emerged as the most troublesome problem – for a fifth straight year – with 24% naming it in their top four; followed by:
    • Health insurance costs (17%)
    • Property taxes (13%)
    • Availability of skilled labor (10%)
  • 80% expect health benefit costs to go up in 2026
  • 72% expect an increase of local property taxes – versus 26% who expected them to remain the same, 2% expect a decrease

State competitive levels

• • 43% believe New Jersey’s public schools are better than other states
  • 30% said New Jesey does a better job at protecting the environment than other states (up 6% from the past two years)
  • 27% said New Jersey’s workforce is better than other states
  • 29% feel that New Jersey is a better place to live than other states
  • 87% listed New Jersey as worse than other states in taxes and fees
  • 76% said New Jersey was worse than other states in controlling government spending
  • Respondents said New Jersey was worse than other states in controlling health care costs (69%), controlling labor costs (63%), attracting new businesses (63%), cost of regulatory compliance (60%) and attitude toward business (58%)

The overall cost of doing business was named as the most troublesome problem for New Jersey businesses for a fifth straight year.

New Jersey’s economic climate

• • 34% expect a slowdown in their industry (same as last year’s survey); 14% expect an expansion; and 8% said their industry is moving from slowdown to recovery with 5% moving from expansion to slowdown; 40% said business conditions in their industry would stay the same
  • 59% have no plans to expand; while 26% said they would expand in another state, versus 12% who would expand in New Jersey

Economic outlooks

• • 23% describe the state’s economy as good; 52% call it fair and 25% poor; less than 1% called it excellent
  • 16% believe New Jersey’s economic will be substantially or moderately better in the first six months of 2026 (down from 23% in last year’s survey)
  • A combined 41% said New Jersey’s economy will be moderately or substantially worse in the first six months of 2026
  • Overall, New Jersey has a -25% net outlook for the first half of 2026 (it was -3% in last year’s survey)
  • National economy was mixed with 39% describing it as good, versus 42% fair
  • 34% believe the U.S. economy will perform moderately worse (25%) or substantially worse (9%) in the first six months of 2026

Purchases and prices

• • 61% said prices for their products and/or services increased (third straight year of this trend)
  • 39% expect to increase the dollar value of their purchases in 2026 and 22% anticipate a decline for a positive net outlook of +17% (versus +29% in last survey)
  • In 2025, 52% of businesses made investments in productivity (down 10% from 2024) – and the lowest percentage of investments in the survey since 2020, during the heart of the pandemic

“New Jersey is a notoriously high-cost, high-burden state to run a business, and a national outlier in many business tax categories,” said Siekerka. “While we are very encouraged that the incoming Sherrill administration wants to help reduce costs and burdens for small businesses, we are dismayed to still see legislation in Trenton that challenges job creators of all sizes and feeds into the anti-business reputation.”

The full survey results are available here.