New Jersey’s Economy: Leading Industries Fueling GDP Expansion

New Jersey’s economic landscape is driven by several dominant industries, including pharmaceuticals and life sciences, financial services, manufacturing, technology, and transportation and logistics. As of 2023, the state proudly hosts 13 Fortune 500 companies, underscoring its economic significance.

Key Insights

• Financial services, transportation and logistics, and life sciences stand as New Jersey’s largest industries.
• Despite a contraction in the technology sector, healthcare and life sciences continue to expand, fueled by a strong network of institutions and an aging population demanding more services.
• Ongoing infrastructure investments have strengthened transportation and logistics industries across the state.

1. Pharmaceuticals and Life Sciences

New Jersey boasts a flourishing life sciences sector, demonstrated by its employment trends. The state is recognized globally for having the highest concentration of scientists and engineers. The life sciences field here encompasses pharmaceuticals, biotechnology, and medical device manufacturing.

In 2020, the sector employed approximately 76,510 workers, representing 2.4% of New Jersey’s private sector workforce and about 1.3% nationally. Major pharmaceutical giants like Johnson & Johnson and Merck & Co. Inc. are headquartered in New Jersey. Between 2015 and 2020, the pharmaceutical industry in the state grew by nearly 20%.

The presence of teaching hospitals, research centers, and clinical trial facilities attracts top biopharmaceutical companies such as Bioclinica and Genesis Biotech. The state's robust public education system also contributes significantly to the availability of highly skilled research professionals.

With 17.4% of residents aged 65 and older as of mid-2022, demand for healthcare services is rising. The Bureau of Labor Statistics forecasts home healthcare services to outpace other sectors in growth.

The New Jersey Department of Labor projects healthcare as one of the fastest-growing industries, expecting an addition of 64,860 jobs from 2018 to 2028, growing at an annual rate of 1.2%.

2. Financial Services

New Jersey’s dense population and proximity to New York City make it an ideal hub for financial services, including banking, securities, insurance, and accounting.

Prudential Financial maintains its headquarters in the state, alongside numerous banks operating near New York and Philadelphia. The state is also home to several large data centers servicing New York's financial sector.

In 2020, financial services employed over 218,000 people, accounting for 6.8% of private sector jobs and contributing $32 billion to New Jersey’s economy, representing 6.6% of the state’s GDP.

3. Manufacturing

The manufacturing sector employed close to 230,000 workers in 2020 and contributed approximately $54 billion to the state’s GDP in 2019, making up about 10.1% of total output.

Manufacturing wages average well above the state's private sector mean of $74,000, with employers in this sector paying around 7% of all state wages. Although job numbers have declined since 1990, the sector remains a vital and growing part of New Jersey’s economy.

4.2%

New Jersey’s unemployment rate stood at 4.2% as of August 2023.

4. Technology

New Jersey serves as a center of innovation, hosting advanced industries including technology. In 2020, the technology sector employed 184,395 workers, representing 5.8% of private sector employment and paying $26.9 billion in wages. The average annual wage in this sector is notably high at $146,123.

The technology workforce is primarily engaged in computer systems design and related services, which make up 40% of employment in the sector.

Employment peaked in 2007 but declined during the Great Recession (2008–2010). Since 2011, the sector has recovered, though recent years have seen slower growth due to competition from tech hubs like the San Francisco Bay Area, New York, and Austin, which attract talent away from New Jersey.

5. Transportation and Logistics

Investment in infrastructure has boosted employment in transportation and logistics, especially among civil engineers. This cluster accounted for 7% of private sector wages and contributed over $62.5 billion to New Jersey’s GDP in 2020, ranking sixth highest nationally by dollar contribution.

Does New Jersey Have a Strong Economy?

Absolutely. New Jersey ranks ninth among U.S. states for GDP, supported by thriving industries such as financial services, manufacturing, and pharmaceuticals. It is home to some of the world’s largest pharmaceutical companies.

Is New Jersey a Wealthy State?

New Jersey is among the wealthiest states in the country. It ranks fourth nationally in median household income, with $92,340 recorded in 2022, trailing only Maryland, Utah, and Massachusetts.

What Are the Key Industries in New Jersey’s Economy?

The state’s economy is composed of pharmaceuticals, life sciences, technology, financial services, manufacturing, construction, healthcare, leisure and hospitality, retail trade, and transportation.

The Bottom Line

New Jersey maintains a robust and diverse economy, excelling in sectors like financial services, pharmaceuticals and life sciences, transportation, technology, and manufacturing. Its position as the ninth-largest GDP state reflects its vital role in the national economy as of 2022.

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