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Proceeding With Caution
While the region’s money-minded experts don’t anticipate a knock-down, drag-out 2024, they do advocate moving ahead with deliberate, measured decisions, taking a closer look at your financials, and planning ahead to safeguard as much as possible against high inflation and an increasing cost of doing business.

by Madeleine Maccar

It is, by all accounts, hard to get excited about the financial landscape of 2024.

But there’s no reason to fear the year when it comes to money matters, either.

While some industries should find a considerable amount of demand and success in the next 11 months—experts point to how well health care typically fares in most economic conditions and note that homebuilders in general are still seeing a boom in business as people settle into their homes for the long term rather than incur the cost and headaches of relocation—many, like supermarkets and restaurants, will most likely be gritting their teeth to get through a year expected to be more about surviving than thriving.

“Business leaders should be very cautious heading into 2024: Persistent inflation, a possible recession and a presidential election year make for a volatile mix for any business,” cautions Masso Torrence Wealth Management Managing Partner John Torrence. “I don’t anticipate large-scale expansion for most companies this year. A focus on core business and tight financial control will be prudent strategies. But I think the local economy will hold up reasonably well, even if we see a slight recession.”

Think of 2024 as a sports dynasty’s rebuilding year: Sometimes the stars align and you get to reap the benefits of a magical season, and sometimes you need to spend some time proactively revisiting and revising the strategy behind how you can best allocate your assets to get back on track for another banner year.

For many, that means scrutinizing your company’s finances and expenses to identify any areas causing an undue drain on your resources. Reducing lag in a year that looks to be defined by putting your head down and barrelling ahead can be the difference between greeting 2025 with open doors or a shuttered business.

“I do think there’s going to be some growth—I think it’s going to be slow—but I also think there’s going to be a sense of cautious optimism. I think you’re going to see a little bit of a yoyo effect on markets in terms of rates, and obviously rates are going to be what makes deals go. It’s interesting because the unemployment rate is low but inflation is still high and the cost of goods is still high,” says Greg Carlise, SVP – Southern New Jersey and Coastal Market President at TD Bank. “I know some companies, especially on the smaller side, they don’t necessarily take a forensic look at their numbers monthly and I think that, in this moment in time, every company needs to truly reconcile your books at the end of the month. You need to make sure you’re managing expenses when and where you can and, if at all possible, maybe you can work a shared-service agreement with other companies of like sizes.”

It’s a year that isn’t just impacted by the lingering malaise that 2023 dragged in with it, from persistently high inflation and the soaring costs of goods making everyone feel the squeeze to international strife coming home to roost locally and the general uncertainty that’s plagued a post-lockdown world. The year to come also heralds the presidential election, a mechanism of democracy that used to be a non-issue for the business world that has become a bona-fide wild card in contemporary times, as Carlisle adds that “now it seems like every presidential election year, you’re at the mercy of where the economy lies.”

Navigating an uncertain future is, however, a little easier to do when you’re not going it alone. There’s no dearth of financial professionals calling South Jersey home while also reliably serving as business owners’ trusted advisors in monetary issues like wealth management, investments, identifying one’s appetite for risk and well-informed business decisions. Additionally, with the year in its infancy, there’s still plenty of time for conditions to change, the market to reflect trends still to come and for life to play out as unpredictably as it always does: Having real-time access to a trusted advisor who knows you, your company and your goals is an asset in moving confidently ahead with well-contextualized advice no matter what comes next.

Working with experts in the field has the additional advantage of amplifying your own lived-in learning experiences by tapping into their own respective expertise and hard-won insights. Oftentimes, those professionals have given their clients some peace of mind in difficult times by realistically assessing the historical context of previous economically rocky roads, underscoring the fact that things always right themselves in due time and that each obstacle cleared offers the tangible wisdom that might be tough to swallow now but could be invaluable for the next round of turbulent times.

“Credit unions have weathered numerous storms, including wars, pandemics, economic collapses and, here in New Jersey, actual super storms,” notes Mike Dinneen, president and CEO of First Harvest Credit Union. “If we look back on our careers, oftentimes our greatest learning moments were those times when we had to endure significant challenges, whether it was economic factors, post-9/11 or even the recent pandemic. We often teach our employees to look for the learning opportunity in each hardship.  For families or businesses, the suggestion would be to use preparation as a way to better weather a hardship—whether it’s saving, preparing or avoiding certain business risks. Chance or unforeseen circumstances are always better weathered by those who are most prepared.”

For those who are tired of waiting for brighter days ahead, there are always some fiscal opportunities, too, to explore and seize upon even when the costs of doing business are high. But if pouring your energy into weathering the storm right now is your preferred course of action, there are both investment options and proactive measures poised to be safely advantageous strategies for making it through 2024. 

“Everybody’s a little different but you have to plan ahead no matter what,” confirms Stan Molotsky, president and CEO of SHM Financial Group. “If you can position yourself so you can handle a certain amount of adversity for a certain period of time, and if you make sure that you’re funded properly so that you can get through a six- or a 12-month period with half the business you thought you were going to have to prepare yourself for when you’re going to be much stronger and better, I think that’s a key thing. … It’s a great time to put money into certain things that are generating that higher income flow, maybe not as much of a growth factor but from an income flow that you can get. You compound that over a period of time, and that gives you a pretty nice nest egg in three, four or five years.”

Still, many are feeling the pinch of the dollar’s reduced buying power, and even the most assiduous approach to coming out ahead can be thwarted by a daunting reality with worrying ripple effects impacting the region’s households and businesses.

“The Federal Reserve has indicated that they plan to begin reducing rates in 2024. This may mean that deposit and overall savings rates may slowly decrease over the next 12-18 months,” Dinneen explains. “Hopefully, a decrease in interest rates will make access to borrowing more affordable for business owners and families. Ideally, we’d hope that the potential interest-rate decrease would make housing and car-buying more affordable, but the plain and simple lack of housing inventory is an even greater hindrance to the housing market. As a low income-designated credit union, our major concern is that the interest rate environment and lack of housing has conspired to make the dream of home ownership unattainable for many in South Jersey right now.”

Even though it might seem like an awful lot of economic hardships are happening all at once, 2024 did come in on the sunsetting of some of the biggest hurdles comprising the state’s notoriously stifling business expenses that have long been the bane of many entrepreneurs’ bottom lines. In fact, developments like the corporate business tax (CBT) surtax ending as 2023 receded into the past indicate that New Jersey’s business advocates are making their voices heard to propel some long-overdue changes for the better—improving both the present operational landscape for the state’s businesses and its reputational image.

And while there are certainly types of industries and financial positions that will fare comparatively better than others no matter what’s in store for 2024, being in South Jersey is a fairly insulating factor the entire region benefits from. Its diversity in both demographics and business types—plus the benefits of living in accessible proximity to major cities, tourist attractions, cultural offerings, and the vast business potential of an area that’s home to an array of industries without being too reliant on any one of them—go a long way in absorbing some of the harder hits that come with uncertain times.

“I read somewhere that if you take a snapshot from outer space at night and you look between Boston and D.C., you’ll see that it’s one of the most lit-up parts of the United States because it’s an incredibly dense corridor,” Carlisle says. “You have great access to railways, highways and waterways, so the ability to transact business here, you’re really set up for that infrastructurally. We have the eds and meds, and we have a boatload of density so I think geographically, we’re blessed to be where we are and to have so many businesses feeding off each other.”

“We have a fairly diverse mix of industries and a well-paid workforce, so we are better positioned for a general economic slowdown than many regions,” adds Torrence. “We have a diverse set of industries here and, quite frankly, the one that has remained relatively strong is the labor market. This isn’t Detroit where the car industry is everything, this isn’t Silicon Valley, this isn’t Google, where we’re laying off software engineers: Here in South Jersey, we tend to be prudent, we hire the employees we need, and maybe a few extra in anticipation of business growth, so we tend to not lay people off and wages remain relatively robust. That’s good for a consumer-driven economy.”

All of those factors and more, Molotsky points out, are exactly why South Jersey truly is an excellent place to live, play and work—a reality that so many of those comprising the region’s business world have been both working toward and endeavoring to maintain. 

“South Jersey is the greatest kept secret in the world! There’s no question that its very, very diverse population and diversity of industry helps. There’s a constant inflow of businesses that keep popping up all the time, especially near the Cherry Hill Mall and Haddonfield-Berlin Road area,” he says. “This is a great place to live, a great place to be from, we have all the things we need going for us: We’re close to Philadelphia, New York, Washington, D.C., and the Shore, we’re close to the airports, we have a million and one restaurants to go to and the weather isn’t so bad—what more can you want?”

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Published (and copyrighted) in South Jersey Biz, Volume 14, Issue 1 (January 2024).

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