A monthly survey of Jacksonville area manufacturers by the University of North Florida’s Local Economic Indicators Project is showing pessimism about the economy.
The Jacksonville Economic Monitoring Survey asks manufacturers for information on 12 indicators of their companies’ performance, and nine of the 12 indicators were contracting in May while the other three were unchanged.
“The overall manufacturers’ sentiment, particularly reflected in Jacksonville’s Business Activity Outlook Index, has become significantly pessimistic,” UNF economist Albert Loh said in his report from the survey.
“This decline suggests that companies are anticipating a contraction in business activity over the coming year, reflecting a significant loss of confidence in the future performance of the local economy,” he said.
Employment among the manufacturers was stable in May, but it had been showing strong growth in April.
“This shift from strong growth to no growth in the span of one month is quite drastic and implies that manufacturers in the region have significantly slowed their hiring,” Loh said.
Beyond Jacksonville, the widely watched U.S. Purchasing Managers Index by the Institute for Supply Management is also contracting, Loh said.
“This contraction at both the local and national levels could be indicative of broader economic trends, potentially driven by wider macroeconomic pressures,” he said.
The pessimistic outlook among Jacksonville manufacturers could become a self-fulfilling prophecy.
“This outlook reflects the expectations of businesses and may not necessarily translate into actual economic outcomes,” Loh said.
“However, a decline in sentiment could contribute to a slowdown if businesses act on their expectations, which seems to be the underlying cause of many contracting indexes discussed in this report,” he said.