The region’s economy experienced overall declines in the first quarter, attributable to the pandemic and mandated curtailment of business activity across the state in March, according to firms responding to the South Jersey Business Survey. The survey’s indicators of overall company activity and sales dropped to their lowest readings in the 29‐year history of the survey. The firms also registered notable deterioration of their forecast for the next six months.

Current Indicators Hit Record Lows
The survey’s broad indicators for activity and sales plummeted in the first quarter (see Charts 1–3 on page 4). The survey’s measure of individual company activity decreased from a high reading of 29.3 in the fourth quarter to ‐44.7 in the first quarter. Almost 65 percent of the firms reported declines in sales, while only 12 percent reported increases.

On balance, the respondents also reported decreases in employment in the first quarter. The current employment index fell from a high reading of 19.5 in the fourth quarter to ‐9.9, the first negative reading in 17 quarters (see Chart 4).

The firms were asked about the impact of the COVID‐19 crisis on business (see Special Questions on pages 2–3).

As of the survey week, a large percentage of the firms reported either partial temporary shutdowns of their businesses (30 percent) or total temporary shutdowns (10 percent), with additional firms planning to do so. Over 36 percent of the firms had already reduced their payroll staff, and 32 percent had reduced the number of temp or contract workers. Similar percentages said they were planning to make cuts.

When asked about their concerns over the next quarter, 57 percent were most concerned about maintaining adequate cash flow, 51 percent collecting payables from customers, and 30 percent ncurring excessive debt.

Firms’ Outlook Deteriorated
The survey’s indicators for future activity and sales paralleled the decline in current indicators and hit record lows. The firms’ employment forecast also deteriorated. More firms (51 percent) expect employment declines in the next six months than expect employment increases (5 percent).

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