For the fourth straight month, a survey of Jacksonville area manufacturers by the University of North Florida’s Local Economic Indicators Project indicates the economy is contracting.
However, the businesses continue to express optimism about the economic outlook for Northeast Florida.
The purchasing manager’s index derived from UNF’s Jacksonville Economic Monitoring Survey stood at 48.9 in July. This was the fourth straight month the index was below 50, which indicates contraction.
“This figure suggests that Jacksonville’s manufacturing sector is experiencing some challenges, though less severe than the national level,” UNF economist Albert Loh said in his monthly report on the JEMS survey.
He said a national PMI compiled by the Institute for Supply Management was at 46.8.
“Nationally, weak demand, declining output, and accommodative input conditions contributed to the ongoing downturn,” Loh said.
But the Jacksonville survey’s business activity outlook index was at 53 last month, indicating the manufacturers expect expansion in activity over the next 12 months.
“This positive outlook is supported by companies’ strategies to drive growth, such as increased spending on digital advertising, which has resulted in significant volume increases for some businesses,” Loh said.
He said responses from Jacksonville-area manufacturers presented a nuanced picture.
“While the overall outlook is positive, some companies describe the current marketplace as ‘flat’ or experiencing ‘slowing growth.’ This suggests that while there is general optimism, it is tempered by caution, particularly regarding the challenges of finding qualified candidates for manufacturing roles and concerns about softening demand,” he said.
“The mixed sentiment reflects an environment where companies are growing, but perhaps not as robustly as they might like. They are aware of the potential headwinds that could impact their operations in the coming year.”
Another positive sign in the JEMS survey was the employment index, which stood at 52, indicating that manufacturers are hiring.
“The expansion in employment suggests that businesses in Jacksonville are growing or at least maintaining robust operations, which is crucial for overall economic health,” Loh said.
“While the Jacksonville economy is facing some headwinds, such as slower supplier delivery times and cautious inventory management, these challenges are not as severe as those faced nationally,” he said.
“The local manufacturing sector appears to be more resilient, with businesses showing a proactive approach to managing costs and seeking growth opportunities.”