Medina: “New Jersey’s fundamentals continue to improve, setting this market up for a full comeback by 2015. Proximity to New York City gives New Jersey an advantage over other states, and we expect to see strong signs of growth in the next few years. New Jersey still has advantages in terms of wealth, demographics, and population density—U.S. Census Bureau data for 2010 indicates that New Jersey continues to lead all states in population density, and with 1,196 people per square mile, the state’s population is considered to be 100 percent metropolitan because of proximity to and interaction with urban and town centers. New Jersey’s population density is greater than Japan’s, India’s, and the People’s Republic of China.”
Why is population density important?
Medina: “Scale matters because it allows producers to save on the costs of supplying goods and services. The basic concept of ‘agglomeration economies’ is that production is facilitated when there is a clustering of economic activity.”
In general, then, how will 2012 play out?
McCarthy: “Overall, 2011 was a year of disruption—a strong start followed by natural and man-made disasters that slowed expansion to a crawl. There were some positive signs at year-end, however. We’re calling 2012 ‘the year of government deleveraging,’ with uncertainty over taxes, regulations, finances, politics, and the European crisis continuing to dominate the outlook. That makes everyone cautious—businesses, households, investors. Our view is that growth is likely to remain sluggish, but the second half of 2012 is likely to be better than the first half.