The largest industries driving New Jersey’s economy include pharmaceuticals and life sciences, financial services, advanced manufacturing, information technology, and transportation and logistics. There are 16 Fortune 500 companies based in New Jersey.
Key Takeaways
- New Jersey’s largest industries include financial services, transportation and logistics, and life sciences.
- While the technology industry in New Jersey is shrinking, the healthcare and life sciences industry continues to grow due to the concentration of institutions and demand driven by an older population.
- Continued infrastructure development has also buoyed the transportation and logistic industries in New Jersey.
1. Pharmaceuticals and Life Sciences
Life sciences is a growing sector in New Jersey, which is shown by its employment trend. In fact, New Jersey reportedly has the highest concentration worldwide of scientists and engineers in the world. New Jersey’s Life sciences employment has three primary components: pharmaceuticals (43.8%), biotechnology research and development (40.9%), and medical device manufacturing (15.3%).
The sector employed an average of 76,430 or 2.2% of all private sector workers in the state for 2019. Those numbers comprised about 1.2% on a national scale. Pharmaceutical industry leaders that are based in New Jersey include Johnson & Johnson and Merck & Co. Inc. Over a five-year period from 2014 to 2019, New Jersey’s pharmaceutical industry grew by 15.1%.
Teaching hospitals, research institutions, and clinical trial assets are all attractive for these biopharmaceutical developers. Bioclinica and Genesis Biotech also have a presence in New Jersey. New Jersey’s strong public education and post-secondary institutions are a major factor contributing to the presence of highly qualified research talents.
New Jersey’s residents older than 65 years old comprise 16.6% of the total population. These demographics have a positive impact on demand for healthcare services, and the Bureau of Labor Statistics (BLS) predicts home healthcare services will outpace other large verticals. Home health services are projected by the New Jersey Department of Labor as one of the fastest-growing industries in the state. From 2018 to 2028, home healthcare is expected to add 64,860 jobs at an annual increase of 1.2%.
2. Financial Services
New Jersey is an attractive base for financial services firms due to population density and proximity to New York City. Finance industry firms represent industries including banking, investing such as securities and commodities, insurance, as well as accounting. Prudential keeps its headquarters in New Jersey, and many other major banks have operations close to New York or Philadelphia. Several large data centers that serve New York financial clients are also located in the state. With 221,990 employees in 2018, the financial services industry accounted for 6.3% of total private sector jobs in New Jersey and contributed $33.3 billion to the state economy.
3. Advanced Manufacturing
There were near 9,000 advanced manufacturing establishments in New Jersey employing close to 250,000 people in the advanced manufacturing sector in 2019. The advanced manufacturing industry sector accounted for approximately $50.5 billion of state gross domestic product (GDP) in 2019, close to 9.1% of all output. In 2019, New Jersey ranked fifth among states for chemical manufacturing after Texas, California, Illinois, and Ohio.
Chemical manufacturing is the largest segment of advanced manufacturing in the state. Close to two-thirds of all manufacturing industry employment in the state is considered advanced. The average wage of workers in this sector is well above the state private sector average for 2019 at $67,000, and advanced manufacturing employers paid approximately 8.7% of all state wages. Since 1990, this sector has experienced job losses, but continued employment indicates a growing sector.
4. Technology
New Jersey is a hub of innovation and home to advanced industries such as the technology industry. It employs over 183,352 workers, providing almost 5.2% of state private sector jobs, and contributes $24.5 billion in wages. That makes sense, given the annual average wage of those working in the technology industry had average annual wages of about $91,250. New Jersey’s technology sector primarily is found within professional and technical services (78%) and in information technology (22%).
From 2004 to 2019, employment in the sector reached its highest in 2007 at close to 189,894 and then declined during the Great Recession from 2008 to 2010. Employment has been on the rise since 2011, although in recent years the technology sector in New Jersey has slowed, due to growing technology hubs in the San Francisco Bay Area, New York, and Austin incentivizing workers to move out of state.
5. Transportation and Logistics
Spending on infrastructure improvements has been driving employment in New Jersey, particularly among civil engineers. While total wages for the transportation, logistics, and distribution cluster accounted for 12.9% of private sector wages statewide, it contributed more than $66.9 billion to New Jersey’s GDP in 2019. That made it the sixth-highest dollar amount contributed per state nationwide. In addition, a new Transportation Trust Fund (TTF) budget is expected to generate $16 billion from 2016 to 2024. The New Jersey Transit continues to earmark funds for new buses, rail cars, and light rail vehicles.
Regarding the port, Bethann Rooney, department director of Port Performance Initiatives at the Port Authority of New York and New Jersey, stated that two-thirds of the port’s cargo is on 8,000 twenty-foot equivalent (TEU) ships, but this was to increase to 12,000 TEUs when the Bayonne Bridge is complete. The New Jersey Department of Labor also expects civil engineering to be one of the fastest-growing industries, rising from the employment of 16,600 people in 2010 to 20,900 people in 2020.