NJBIA 67^th Business Outlook Survey:
Increased Energy Costs, Tariffs Further NJ’s Business Affordability Malaise

On a national level, tariffs, or the uncertainty around them, proved difficult for some. And on a statewide front, rampant energy cost increases also served as a strong and largely unexpected deterrent to profits.

Those conditions created even more negative numbers around business affordability in New Jersey:

• When asked if New Jersey lawmakers had done enough to address business affordability in the previous 12 months, 81% said no.
• 77% said business affordability had declined over the past five years.  
• Most glaringly, in the survey’s performance comparison to other states, 78% said New Jersey was worse than other states in controlling energy costs.  
• A year ago, only 53% said New Jersey was worse than competing states in controlling energy costs.
• Only 10% said they believe New Jersey has made progress over the last year in easing regulatory obstacles, a common refrain among business owners that did filter down to both gubernatorial candidates while on the campaign trail this year.

“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 NJBIA President and CEO Michele Siekerka. “These results show a great need for more pro-business policy amid declining profits and expectations.

“New Jersey is a notoriously high-cost, high-burden state to run a business, and a national outlier in many business tax categories. 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 we have nationally.”

Other data points in the survey include:

On Energy Costs

• 77% of the 569 respondents, either business owners or upper-level managerial level staff, said they were substantially (32%) or moderately (45%) impacted by increased energy costs in 2025.
• Of those, 37% said they needed to raise prices to accommodate those largely unexpected costs.
• Despite promises from gubernatorial candidates Mikie Sherrill and Jack Ciattarelli to remedy those front-page news energy concerns during the year, 81% said they were somewhat unconfident (35%) or not confident at all (46%) those high expenses would moderate in 2026.  

On Tariffs

• 49% of respondents said tariffs impacted their supply chains in 2025.
• Of those impacted, 88% said they faced increased prices from their supply chains.
• Also, of those impacted by tariffs, 36% said they sourced products from different suppliers; 23% said they reduced or lowered the quality of their inventory.
• A total of 81% said they were 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.
• Strategy approaches they said will be utilized included diversifying international suppliers (50%), increasing domestic manufacturing (41%), and increasing inventory or stockpiling (38%).

Staffing
Improvingly, 49% of businesses claimed they were challenged in finding staffing in 2025. That’s compared to 55% in each of the two previous years, and 70% in 2022 due to a pandemic hangover.

Of those who were challenged to find staff, 74% said there were not enough candidates or applicants to fill open positions, while 59% said candidates lacked the required skills or qualifications.

Employment  
New Jersey businesses continue to see a slight decrease in hiring levels.

In 2025, 17% increased hiring – down from 20% in 2024 and 23% in 2023. Another 19% decreased hiring.

Looking to 2026, 24% predicted they will increase employment, compared to 12% which predicted less hiring – a 12% net positive hiring outlook. Sixty-four percent said they’ll stay about the same.

Profits
From 2012 to 2019, more New Jersey businesses reported more gains than losses in this survey.

That all changed during the pandemic year of 2020, and the climb from that hole continues.

In 2025, only 30% of respondents reported profits for the year. At the same time, and for a second straight year, 45% reported a loss.
For 2026, 36% believe they will make a profit, compared to 28% who anticipate losing money. That net positive of 8%, however, is actually a step back from the 15% net positive forecasting into 2025.

Of the 36% hoping to be on the plus-side for 2025, 12% are forecasting profits of 1% to 3%.

Sales
For a second straight year, 39% of respondents claimed an increase of sales. Of those, nearly 12% said they had an increase in sales between 1%-3%.

Forty-six percent of businesses projected an increase in sales for 2026 – slightly below the 48% projected increase for 2025 in last year’s survey.

That’s compared to 22% who foresee less sales next year. Overall, that’s a +24% net positive forecast for sales.

Two years ago, that net positive outlook for sales was only +17%.

Wages
Despite continued business challenges, New Jersey employers continue to attempt wage increases – although at a lower wage percentage than in previous years.

In 2025, only 17% of businesses increased pay for employees by 5% or more. That’s down 10 percentage points from last year and 17 percentage points from two years ago.

All totaled, 68% increased wages in 2025. But in 2024, 77% said they increased wages.

Looking ahead to 2026, 10% say they’ll increase wages by more than 5%. Comparatively, a year ago when respondents were looking ahead to 2025, 16% said they would raise wages more than 5%.

Another 34% said they’ll raise wages between 3% and 4.9% in 2025. All totaled, 67% said they’ll increase wages in 2026, while 31% anticipate no change in wages.  \

NJ Challenges  
For the fifth straight year, the overall cost of doing business was listed as the most troublesome problem for New Jersey businesses – with 24% listing it as tops among their Top 4.

Health insurance costs (17%) were second, followed by property taxes (13%) and availability of skilled labor (10%).

Extremely consistent with recent years, 80% of respondents said they expect their health benefits costs to go up in 2026. Of those, 33% anticipated those health benefit costs to rise 11% or more in 2026.

As for local property taxes, 72% expected an increase for a second straight year, 26% expected them to remain the same, and only 2% expected a decrease.

New Jersey’s Competitive Levels  
The leading competitive positive for New Jersey: 43% rate the quality of New Jersey public schools to be better than other states.

At protecting the environment, 30% said New Jersey does better than other states – a 6% bump from the past two years.

Another notable positive: 27% said the quality of New Jersey’s workforce was better than other states.

Additionally, 29% said New Jersey was a better place to live than other states.

In the areas more tied to business where New Jersey continues to struggle, there were only minor variations from recent years.

The Garden State was listed as worse than others in taxes and fees by 87%, compared to 85% in 2024. In controlling government spending, 76% said New Jersey was worse than other states, compared to 70% in 2024.
New Jersey was also listed as worse than other states in controlling healthcare costs (69%), controlling labor costs (63%), attracting new business (63%), cost of regulatory compliance (60%), and attitude toward business (58%).

NJ’s Economic Climate   
When respondents were asked about the current business conditions in their industry, 34% said they were experiencing a slowdown – the same percentage as last year – while 14% said they were experiencing an expansion.

Eight percent said their industry was moving from a slowdown to a recovery, while 5% said they were moving from an expansion to a slowdown.

A majority (40%) said business conditions in their industry were staying the same.

Fifty-nine percent said they had no plans to expand, while 26% said they would expand in another state, compared to 12% that would expand in New Jersey. Another 3% said they would expand in New Jersey and another state.

As a location for new or expanded facilities, 22% listed New Jersey as very good or good – a six-percentage point decline from 2024. Another 36% described the Garden State as fair, and 43% ranked it as poor.

When asked if their business had postponed installation of equipment or any expansion due to delays in permitting or a regulatory process, 17% said yes – a five-percentage point jump from a year ago.

The needle continues to move in the right direction on New Jersey’s appeal for people in their golden years, albeit slowly, with 47% saying they are planning to keep New Jersey as their domicile in retirement. That number is up 15 percentage points from six years ago.

Economic Outlooks  
The opinions and the outlooks of New Jersey’s economy is more challenged this year.

Only 23% described the state’s economy as good, while 52% called it fair and 25% listed it as poor. Less than 1% called it excellent.

Only 16% felt New Jersey’s economy would be substantially or moderately better in the first six months of 2026. A year ago, that positive look-ahead number was 23%.

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 next year. A year ago, looking at 2025, it was only a -3% net outlook.

The rating of the national economy was mixed: 39% described it as good, while 42% listed it as fair.

Looking ahead, 34% said they believed the US economy would perform moderately worse (25%) or substantially worse (9%) in the first six months of 2026. Forty percent rated the recent economic performance in their particular industry as good, while 42% called it fair.

Results were nearly identical in how respondents measured the 2026 outlook in their industry, with 29% claiming it will be substantially or moderately better and 30% stating it will moderately or substantially worse.

Purchases and Prices  
For a third straight year, 61% said prices for their products and/or services in- creased. For 2025, 6% increased substantially, while 55% increased modestly. Only 3% said they decreased prices this year.

Regarding future purchasing plans, 39% are expecting to increase the dollar value of their purchases in 2026 and 22% are anticipating a decline. That’s a net positive of +17% for next year, compared to the +29% net positive outlook for 2025.

In 2025, only 52% of businesses said they made investments in productivity – a 10 percentage-point decrease from 2024. That is the lowest percentage of investments in the survey since 2020, during the heart of the pandemic, when 50% of respondents made investments in productivity.

About the Survey  
Questions for NJBIA’s 67th Annual Business Outlook Survey were sent to New Jersey business owners and executive staff in September and October, 2025. The report is based on 569 valid responses. Most respondents were small businesses, with 65% employing 24 or fewer people. The survey was conducted by Signet Research.