Newark lies at the heart of the New York/New Jersey metropolitan area industrial economy. Newark is increasingly coming to rely on its strategic location at the center of air, sea, road, and rail transportation networks for economic growth. Manufacturing was traditionally the city's most important economic activity, but it has recently been surpassed by transportation-related industries and telecommunications firms. Seven major highways, railway routes, a world-class shipping terminal, and a busy international airport make Newark a major mid-Atlantic distribution and retail trade center. The city is one of the nation's leading centers in the wholesale trade of chemicals and machinery, and the third largest writer of life insurance policies; both Mutual Benefit and Prudential Insurance Companies are headquartered in Newark.
Items and goods produced: polymers, beer, electrical products, machinery, leather, precious metals, jewelry, electronic equipment, chemicals, textiles, paint, varnish, perfume and cosmetics, paper boxes, foodstuffs, greenhouse and nursery products
A concerted effort between the city of Newark, state and federal governments, and business and civic groups has stimulated impressive growth and expansion within the past decade. The State of New Jersey in particular provides many incentives to entice and retain new industries and entrepreneurs to Newark and the surrounding communities.
The Department of Economic Development, Training and Employment of Essex County provides direct financial assistance to businesses located in the county and/or guarantees of loans from banks to such businesses for building acquisition, site renovation, and equipment purchases.
In 2002 Newark was designated a Renewal Community by the U.S. Department of Housing and Urban Development. The program encourages municipal self-sufficiency through a variety of federal tax credits as opposed to grant funds. Some of the programs include a Work Opportunity Credit for businesses that hire people who've received family assistance for a long period of time, a Welfare to Work Credit, tax deductions on qualified revitalization costs, and tax credits for employing residents of the Renewal Community zone.
Newark's Urban Enterprise Zone (UEZ) program provides eligible businesses with sales tax exemption equal to 50 percent of the regular sales tax rate, employee tax credits, net worth tax exemptions, tax exemptions for most purchases of tangible personal property, sales tax exemptions for building materials, supplies, or services used in property expansions and improvements, and awards for job creation.
The New Jersey Economic Development Authority (EDA) offers a wide range of financial, real estate development, and technical services to encourage business development and growth in the state. The majority of its assistance is to small and mid-sized businesses, with a growing emphasis on high-tech enterprises. Businesses specializing in technology or biotechnology can transfer tax certificates to other New Jersey businesses, realizing up to 75 percent of their value in cash that can be spent on equipment, facilities, or for other expenses related to the business. The EDA issues bonds to provide financing at favorable interest rates for business ventures, makes low-interest loans, and guarantees loans made by private investors and lenders. It also offers a full range of real estate development services to stimulate both private and public development projects. In addition, the EDA administers a business incentive program that provides grants to expanding or relocating businesses that will create new jobs in New Jersey. Brownfields loans and grants also are available to municipalities and private property owners to encourage the clean-up and redevelopment of hazardous sites around the state.
The New Jersey Redevelopment Authority provides low-interest loans to developers and businesses seeking to construct facilities in urban areas, including small business incubators. The New Jersey Division of International Trade helps companies dependent on international commerce with advice, matchmaking, and access to trade missions and foreign trade shows. Businesses in Newark may be eligible for inclusion in Foreign Trade Zone 49, allowing for some exemptions from full U.S. Customs scrutiny for imported goods that are temporarily stored in the area.
The New Jersey Small Business Development Center (NJSBDC) network specializes in business planning, growth strategy, management strategy, and loan packaging, along with providing help in selling goods and services to government agencies, help to entrepreneurs in commercializing new technologies, linking up companies to local manufacturers who serve as mentors, and counseling for companies regarding overseas trade.
Workforce New Jersey is the state agency coordinating local workforce development efforts. The office assists employers in finding and training new workers, while it also helps employees with continuing education, career exploration, and job searching.
Essex County's Division of Training and Employment coordinates employment programs designed to serve families receiving social assistance. Clients receive assessment and aptitude testing, job readiness preparation, transportation assistance as needed, skill training, adult education, community work experiences, and job placement.
The New Jersey Institute of Technology offers assistance for small manufacturers, new businesses, and defense contractors through specialized programs on topics such as entrepreneurship, environmental compliance issues, and polymer processing.
In February of 2005 the City of Newark finalized an agreement with the New Jersey Devils hockey franchise to build an 18,000 square foot arena in Newark. The proposed facility in the downtown redevelopment district is expected to cost $355 million and should be completed by 2007. To ensure easy access to Devils games and other downtown attractions, Newark's Penn Station is undergoing a $16.1 million update of its escalators, drainage systems, and customer communication devices.
The New Jersey Schools Construction Corporation is in the process of an $8.6 billion renovation of educational buildings throughout the state, with a good portion of the resources being spent in Newark on its public school system. Aging structures are being updated to function as state-of-the-art, twenty-first century learning centers. At the same time, the City of Newark has continued to invest heavily in affordable housing that is also attractive and energy efficient, as the municipality continues to rehab its post-riot image.
Only a mile from the Newark Liberty International Airport, Catellus Development Corp. is planning an industrial warehouse project that will demolish existing structures on the acquired land and replace them with a complex that will include a 600,000 square foot distribution warehouse. Construction is expected to be complete by 2006.
Economic Development Information: City of Newark Economic Development Department, City Hall, 55 Liberty St. Room 405, Newark, NJ; telephone (201)733-6284. New Jersey Economic Development Authority, PO Box 990, Trenton, NJ 08625-0990; telephone (609)292-1800
With 13 miles of waterfront along Newark Bay and the Passaic River, Newark is part of the nation's largest containership port—the Port of New York and New Jersey. The Port opened in 1914-15 and is now leased and operated by the Port Authority of New York and New Jersey; in 2004, more than $110 billion in goods passed through the portal. The Port Authority is equipped to deal with virtually every type of cargo, including vehicles, live animals, large containers, liquid and dry bulk loads, and more. With a main channel 7,000 feet long, the 930-acre Port of Newark can berth 34 ships. Rail freight service is provided by Amtrak and Conrail.
Newark Liberty International Airport (NLIA) is located just south of the city center, providing passenger and cargo service to all points of the globe. Several cargo-specific businesses and structures exist at NLIA, including the FedEx Complex (a regional hub), the United Parcel Service package handling and distribution center, and the 250,000 square foot Air Cargo Center. Cargo processing is state-ofthe-art, with capacity to handle sophisticated and delicate materials with a high level of efficiency. In 2003, NLIA processed 890,712 tons of cargo and served nearly 29.5 million passengers. The Port Authority maintains an administration building near the Air Cargo Center; both the Port of New York and New Jersey and the Newark Liberty International Airport reside within Foreign Trade Zone #49.
The highway system in New Jersey is the most dense in the nation, guaranteeing ample routes into, out of, and around Newark and the surrounding major metropolitan areas. Interstates 280, 80, 78, 278 and 95 link Newark to other large cities, along with a network of U.S. and state highways. Businesses have a wide choice of ground transportation vendors for cargo shipping purposes, from well-established family trucking companies to nationally-known experts such as FedEx and UPS.
Newark's unemployment rate remains considerably higher than the state average. Schools in Newark and the surrounding region offer an array of training in business, industrial, and vocational areas to assist workers in obtaining employment, advancing their careers, or adapting to new innovations in local industry. The region's workforce is especially well trained in communications and utilities work, finance, insurance and real estate, trade, transportation, and chemical manufacture.
It is anticipated that Newark and greater Essex County will experience continued significant growth through 2012 in the healthcare and education industries, along with management and transportation-related services. Manufacturing jobs will continue to be cut over the next decade, with anticipated losses as high as 20.8 percent of total employment in that sector. Statewide, it's expected that the pace of both commercial and residential construction will slacken, while overall employment should increase about 7.5 percent by 2012 (a slightly more gradual 10 year increase compared to the 1992-2002 statistical period).
The following is a summary of data regarding the Newark–Union, NJ–PA, metropolitan area labor force, 2004 annual averages.
Size of nonagricultural labor force: 1,028,300
Number of workers employed in . . .
construction and mining: 41,500
trade, transportation and utilities: 217,100
financial activities: 81,200
professional and business services: 162,300
educational and health services: 137,900
leisure and hospitality: 64,600
other services: 44,700
Average hourly earnings of production workers employed in manufacturing: $15.67 (New Jersey; 2004 annual average)
Unemployment rate: 5.4% (NY–NJ MSA; February 2005)
|Largest employers||Number of employees (2005)|
|Newark Liberty International Airport||24,000|
|Prudential Financial, Inc.||16,850|
|University of Medicine/Dentistry||11,000|
|Public Service Enterprise Group||10,800|
|City of Newark||3,984|
|Horizon Blue Cross & Blue Shield of NJ||3,900|
The New Jersey area remains one of the most expensive places to live in the nation. The cost of housing is a major factor, particularly when combined with high city taxes.
The following is a summary of data regarding several key cost of living factors in the Newark area.
2004 (3rd Quarter) ACCRA Average House Price: $457,430
2004 (3rd Quarter) ACCRA Cost of Living Index: 134.6 (U.S. average = 100.0)
State income tax rate: 1.4%–8.97%
State sales tax rate: 6%
Local income tax rate: None
Local sales tax rate: None
Property tax rate: $2.26 per $100 of assessed value (2004)
Economic Information: City of Newark Economic Development Department, City Hall, 55 Liberty St. Room 405, Newark, NJ; telephone (201)733-6284