New Jersey was predominantly agricultural until the mid-1800s, when the rise of the railroads stimulated manufacturing in northern New Jersey and opened the Jersey shore to resort development. The steady growth of population in the 1900s fostered the growth of service-related industries, construction, and trade, for which the state's proximity to New York and Philadelphia had long been advantageous.
During the 1970s, New Jersey's economy followed national trends, except that the mid-decade recession was especially severe. Conditions in most areas improved in the latter part of the decade, particularly in Atlantic City, with the construction of gambling casinos and other entertainment facilities. Manufacturing in the central cities declined, however, as industries moved to suburban locations.
Although petroleum refining, chemicals and pharmaceuticals, food processing, apparel, fabricated metals, electric and electronic equipment, and other machinery are all important, the state is more noteworthy for the diversity of its manufacturers in 2000, than for any dominant company or product. The service sector of the economy, led by wholesale and retail trade, continued to grow rapidly during the 1990s. The heaviest concentrations of jobs are in and near metropolitan New York and Philadelphia, but employment opportunities in the central and north-central counties have been increasing. Fresh market vegetables are the leading source of farm income. Overall growth in the state economy was robust coming into the 21st century, with annual growth rates averaging over 6% 1998 to 2000. The national recession and slowdown of 2001 slowed annual growth to 2.2%, but in 2002 the state economy was showing resiliency. Employment losses for the state as a whole started later and were milder than for the nation as a whole.
New Jersey's gross state product in 2001 was $365.4 billion, the 8th highest among the states, to which financial services contributed $90.1 billion; general services, $83.5 billion; trade, $62.8 billion; manufacturing, $42.1 billion; government, $35.9 billion; transportation and public utilities, $33 billion, and construction, $17.7 billion. The public sector in 2001 constituted 9.8% of gross state product, the 5th-lowest percent among the states.