Healthcare Institute of New Jersey Releases 2011 Biopharmaceutical and Medical Technology Economic Impact Data
NEW BRUNSWICK, N.J., Jan 04, 2012-The HealthCare Institute of New Jersey (HINJ) today released key findings of its 2011 economic impact survey, which indicates that the life sciences continue to play a leading role in driving New Jersey’s economy. For the eighth consecutive year, the study was conducted by Deloitte.
While the data reported shows a slowing of economic activity, it is important to note that the 2010 results included in the 2011 economic impact survey come from five fewer companies (19) compared to those who contributed the calendar year 2009 results (24), included in the 2010 economic impact survey, making year-to-year comparisons considerably less meaningful. Participation in the annual survey by HINJ member companies is voluntary and confidential.
“Although we had 20 percent fewer companies participating in this year’s survey, those that did supply data demonstrate that the life sciences industry continues to be a major economic driver in New Jersey,” said Dean J. Paranicas, HINJ’s President and Chief Executive Officer. “However, New Jersey continues to face stiff competition from around the world and within the U.S. for our industry’s investment. If anything, this data reinforces the need for our leaders in Trenton and Washington to continue to pursue policies that create a more competitive and attractive business climate here, and we look forward to continuing to work with them to achieve this objective.”
Paranicas added that HINJ and its member companies applaud actions taken over the past several months by Governor Christie and the State Legislature to make New Jersey more competitive and attractive for life sciences investment. They include an aggressive and competitive business recruitment and retention program, adopting the single sales factor as the basis for calculating New Jersey’s corporate business income tax, and enhancing the Business Employment Incentive Program (BEIP) to promote greater private sector collaboration with New Jersey’s universities and colleges.
The HINJ findings showed a total economic impact from reporting HINJ member companies of $24.2 billion in calendar year 2010, as compared to $29.3 billion in calendar year 2009. Paranicas explained that this difference reflects fewer companies responding to the survey and may also be accounted for by the continuing effects of the global recession and industry consolidation. He also cited reduced capital spending (which is consistent with prevailing economic conditions) and reporting from less than all participants about industry spending with New Jersey-based vendors.
The reported number of full-time employees decreased from 55,366 to 51,619 for the same period, a 6.8 percent decline. Reported capital spending decreased to $0.7 billion in 2010, down from $1.5 billion in 2009, and the economic impact of reported vendor spending was $5.5 billion, down from $8.4 billion in 2009. Gifts to New Jersey non-profit organizations totaled $161 million, down from $214 million in 2009. Total taxes paid in New Jersey declined to $731 million, from $773 million.
However, Paranicas also observed that the data submitted by the 16 HINJ member companies that participated in both the 2010 and 2011 surveys shows that the economic impact of those companies was generally constant, at $23.9 billion in 2010 and $24.5 billion in calendar year 2009. Among this cohort, global research and development spending increased by $1.4 billion, to $8.4 billion, and charitable donations in New Jersey also increased 8.1 percent, to $159 million from $147 million.
Paranicas emphasized that there are major bright spots that bode well for future economic activity. Research and development spending in New Jersey was up by 11.4 percent, to $6.1 billion, and medical device trials conducted by reporting companies soared 49.1 percent. Paranicas further noted recent announcements made by HINJ members to expand in New Jersey, as well as by other life sciences companies who have announced they are relocating to, or expanding in, the state.
“We are continuing to see strong life sciences investment in the future and in New Jersey,” said Paranicas.
The HealthCare Institute of New Jersey is the trade association for New Jersey′s research-based biopharmaceutical and medical device companies. HINJ is providing these key findings from its survey and will release the full results early in 2012. To learn more about HINJ, please visit www.hinj.org.
As used in this document, “Deloitte” means Deloitte LLP and its subsidiaries. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.
Posted: January 2012