STONE HARBOR – Dr. Oliver Cooke, associate professor of Economics, Stockton University, discussed economic trends at the Cape May County Chamber of Commerce’s Jan. 17 meeting at The Reeds at Shelter Haven.
According to Cooke, in 2018, Cape May County posted its strongest rate of job growth since 2004. About 1,400 jobs were added to the local economy in the county.
The leisure and hospitality sector lost about 700 jobs in 2018. “The upshot is that the non-leisure and hospitality sector actually experienced some fairly robust job growth last year,” said Cooke. The non-leisure and hospitality sector added about 2,100 jobs.
Data suggested that early 2018 job growth occurred in three industries: education and health services, local government, and professional and business services.
Unemployment Rate
Cooke said the local unemployment rate in the county, slightly above Atlantic City and Vineland metropolitan areas, “fell to 8.5 percent on average over the course of last year from about 9.2 percent in 2017.
“Part of the decline in the unemployment rate, and this holds for both of the other two metropolitan areas as well, has been very much tied to declines in labor forces, and so, as people melt out of the labor force, this puts downward pressure on local unemployment rates, and so, it’s oftentimes quite hard to infer the health of a labor market purely on the basis of its unemployment rate because during prolonged periods of downturn, workers that (sic) are referred to as discouraged workers tend to kind of artificially deflate the unemployment rate.
“The good news is that last year’s decline in the unemployment rate came despite an increase in the local labor force albeit rather modest, running about 1 percent or so in Cape May County,” said Cooke.
Hotel/Motel Sales Tax
Metrics, including hotel/motel sales tax and E-ZPass transactions through Egg Harbor toll plaza, suggested that summer 2018 was good, despite the decline in the county’s leisure and hospitality sector, according to Cooke.
Both sales tax collections and toll transactions were up last year, ahead of what was seen in 2017 and 2016.
Single-family Home Prices
The county’s economy “is heavily tied to the health of the real estate industry,” said Cooke.
Single-family home prices in the county, which fell about 22 percent from 2006-2014, have begun to stabilize, and experienced growth in the last four years.
Looking Ahead
Cooke expects that the regional economy’s 2019 outlook will be tied to the national economy, as well as Atlantic City’s gaming sector.
“I wouldn’t want to go as far to say that Cape May’s economic fortunes are tied exclusively to Atlantic City’s, but I think it’s reasonably clear to most folks that the greater shore traffic that finds its way into Atlantic City clearly benefits locales further south,” said Cooke.
The big question, according to Cooke, regards the staying power of the casino expansion that occurred last summer.
“There’s (sic) already been some public announcements regarding some worries about one of the properties (Ocean Resort) in Atlantic City.
“I can’t speak with any great authority on that other than what you’ve read, I’ve read, and I know lots of folks are starting to have some important questions as it relates to that, and it’s also true, of course, that there are a meaningful number of folks and families that (sic) continue to rely upon the gaming sector that (sic) live in Cape May County.”
Diversification is Key
Diversification of the county economy, transforming a summer-resort economy into a more diversified one, is key to the county’s longer-run economic prospects, but is “easier said than done,” said Cooke.
Related to diversification is population, according to Cooke. The county’s population, at around 94,000, declined about 4 percent from 2010-2017, the third largest population decline among New Jersey counties, behind Sussex and Salem counties.
“This harks back to a very age-old and much-debated local economic development question: which comes first, do the people come first or do the jobs come first,” asked Cooke.
“To my knowledge, and after 20-some years of experience thinking about metropolitan state economies, I’ve never been convinced that there’s an easy answer to this question.”
