NJ’s Affordability Crisis Deepens: 81% of Businesses Say Lawmakers Failed to Act as Energy Costs Skyrocket 78% Worse Than Other States!
the staff of the Ridgewood blog
The Cost Crisis: Energy and Taxes Sink NJ Business Confidence
Trenton NJ, the results of the NJBIA’s 67th Annual Business Outlook Survey for 2025 paint a stark picture: New Jersey businesses are grappling with severe profitability challenges driven by high state costs and unexpected national hurdles.
The two most significant pain points identified by the 569 responding business owners and upper-level managers were rampant energy cost increases statewide and tariffs/supply chain uncertainty nationally.
The overall sentiment regarding affordability is overwhelmingly negative:
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81% of respondents believe New Jersey lawmakers have not done enough to address business affordability in the last year.
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77% state that business affordability has declined over the past five years.
🛑 Energy Cost Shock: NJ is a National Outlier
The most alarming finding focuses on utility costs. New Jersey is now viewed as an extreme outlier when compared to competing states:
| Cost Metric | 2025 Survey Result | Change from 2024 |
| Worse than other states in controlling Energy Costs | 78% | ↑ 25 percentage points (from 53% in 2024) |
NJBIA CEO Michele Siekerka: “We say it often that businesses need predictability, and some did not see those challenges coming as it relates to energy costs, in particular… These results show a great need for more pro-business policy amid declining profits and expectations.”
Key Data on Energy Impact:
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77% of businesses were substantially (32%) or moderately (45%) impacted by increased energy costs in 2025.
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37% were forced to raise prices to accommodate these unexpected costs.
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Despite political promises, a striking 81% are not confident that these high energy expenses will moderate in 2026.
🚢 Tariffs and Trade Uncertainty Hitting Profits
On the national front, tariffs and global supply chain disruptions delivered a hard hit to profitability and planning:
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49% of businesses reported that tariffs impacted their supply chains in 2025.
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Of those impacted, 88% faced increased prices from their suppliers.
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81% said they were not confident at all that they could absorb these raised input prices without passing them on to consumers.
In response, 45% of businesses are planning supply chain strategy changes, including diversifying international suppliers (50%), increasing domestic manufacturing (41%), and increasing inventory/stockpiling (38%).
📊 The State of NJ Business: Profit, Hiring, and Costs
Profits and Outlook (A Step Backwards):
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45% of respondents reported a financial loss in 2025 (matching 2024), while only 30% reported a profit.
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The overall economic outlook for New Jersey is bleak: the net outlook for the first half of 2026 is -25% (a sharp drop from the -3% outlook last year).
Hiring and Staffing:
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The challenge in finding staff improved slightly (49% challenged in 2025 vs. 55% in 2024). However, 74% still cite a lack of candidates/applicants.
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Hiring levels are down: only 17% increased hiring in 2025 (down from 20% in 2024).
Top 4 New Jersey Challenges (5th Straight Year):
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Overall Cost of Doing Business (24%)
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Health Insurance Costs (17%)
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Property Taxes (13%)
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Availability of Skilled Labor (10%)
✅ New Jersey’s Competitive Edge: Where the State Shines
While business costs are a major detractor, the survey reaffirmed key competitive strengths for the Garden State:
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43% rate the quality of New Jersey public schools as better than other states.
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30% say New Jersey is better at protecting the environment (a 6% increase).
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27% praise the quality of New Jersey’s workforce.
Despite these positives, NJ continues to struggle in core business areas: 87% rated the state worse in taxes and fees, and 76% rated it worse in controlling government spending. Only 12% of businesses plan to expand in New Jersey, while 26% plan to expand in another state.
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