The region’s economy experienced overall declines in business activity for the second consecutive quarter, reflecting the effects of the pandemic and state-mandated closings, according to firms responding to the South Jersey Business Survey. The survey’s indicators of overall company activity and sales moved away from the historical low readings in the first quarter but remained negative in the second quarter. The survey’s indicators for future activity showed notable improvements, suggesting that the firms expect growth over the next six months.

Current Indicators Remain Negative

The survey’s diffusion indexes — which convey the direction and breadth of change but not the magnitude — for company activity and sales remained negative but rose from record lows in the first quarter (see Charts 1–3 on page 2). The survey’s measure of individual company activity increased from a low reading of -45.3 in the first quarter to -5.6 in the second quarter. The percentage of firms reporting decreased activity at their companies (41 percent) remained higher than the percentage of firms reporting increased activity (36 percent). The current sales index remained negative at -13.6 but also increased from a record low in the first quarter.

Firms perceived continued declines for the whole region in the second quarter: The general business activity index for the region remained at a low reading of -39.5, although it increased from the 12-year low reading of -63.7 in the first quarter (see Chart 2).

On balance, respondents also reported continued decreases in employment in the second quarter. The current employment index remained negative for the second consecutive quarter at -9.5 (see Chart 4).

Firms’ Outlook Improves

Overall, firms expect increases in future activity over the next six months. The indexes for future company activity, sales, and employment all returned to positive readings. Nearly 49 percent of the respondents expect increases in activity at their own firms compared with 23 percent that expect decreases.

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