NJ economic outlook continues to improve.

Prospect activity as seen by the Area Development Department continues to improve. The improvement is not only in the absolute number of clients seeking site location assistance, but also in terms of the quality of the requests.

This is particularly attributable to an upturn in the economy, but in addition, certain new policy changes initiated by the Whitman Administration have also helped. The reduction in corporate and personal income taxes, the raising of the level of state business retention efforts to the Office of the Secretary of State, the creation of an Economic Development Strategy Commission and finally, a new balanced approach on behalf of the Department of Economic Protection and Energy toward business development have also been helpful.

The Economic Development Strategy Commission is an area particularly appropriate for the State's attention. The resultant economic development strategy document, scheduled for completion in October of this year, can be alternatively represented as a state business plan. We, in economic development, have long been promoting the idea of a balanced, well developed, state economic development strategy. This document, when completed, should effectively enable the state to apply its collective resources in both a business retention and attraction fashion to encourage the state's economic renewal.

We plan on working closely with the Economic Development Strategy Commission in an advisory capacity to assist in their efforts. It is logical to assume that the strategy will call for renewed more intensive efforts in the area of certain business sectors deemed appropriate for New Jersey. They should include market-oriented manufacturing, high tech/research and development, tourism and, of course, international, as well as renewed new retention efforts.

All of these programs and initiatives have a subtle yet dramatic positive effect on the business image that corporate decision-makers have relative to New Jersey. Hence, the increase in prospect activity that we have been witnessing.

In particular, industrial activity continues to outstrip office inquiries. Specific areas of new business activity have included the south Bergen County meadowlands area and the Exit 8-A Tumpike area in South Brunswick. The industrial activity has actually resulted in somewhat of a shortage of Class A industrial space, which may lead us to speculate on new construction for this industry sector in early 1995.

Office activity similarly is improving, however, not at the same rate as industrial. We anticipate the Hudson County waterfront as being the area most likely to see major new office activity, as well as portions of the Route 287 corridor and the Route 1 area.

One of the other anticipated components of the State Economic Development Strategy should be an urban perspective. New Jersey cities, owing to their fine location, access to markets and transportation, underutilized properties and state and local incentive programs, are uniquely positioned for the realization of new business location activity.

The New Jersey Performing Arts Center in Newark, the Liberty Science Museum in Jersey City and the Camden Aquarium represent projects contributing greatly to an improved perception of New Jersey's cities as a place to do business.

Another main focus of the economic development strategy should be international. We are pleased to report companies specializing in export related activity have also been seeking New Jersey locations in growing numbers. Our Trade-Link-NJ program, which began in September of 1993, has already resulted in 4,000 requests for export related advice. This unique program brings together, under the aegis of our Area Development Department, the Company's Marketing Department and a network of over 40 export experts to assist companies in first identifying and then realizing their export potential. Within the next few months, PSE&G does plan to launch the second phase of Trade-Link-NJ. This initiative will be aimed at overseas companies who may be reaching a point where they need to expand/invest overseas. We feel that those companies should be aware of the investment opportunities in terms of facilities and jobs that New Jersey would represent for them.