Jacksonville area manufacturers continue to express uncertainty about the outlook for their businesses, according to a monthly survey by the University of North Florida’s Local Economic Indicators Project.
A purchasing manager’s index derived from the survey of Northeast Florida manufacturing businesses stood at 49 in May for the second straight month.
An index below 50 indicates a contraction in the economy while a reading above 50 indicates expansion.
“Several key economic indicators reflect mixed but stable conditions,” UNF economist Albert Loh said in his monthly report on the survey.
The employment index stood at 51, indicating a slight expansion in hiring, and the output index was 52, showing modest growth in production.
However, the index for new orders for the manufacturers was 46 and the backlog index was 43, a sign of lower activity in the coming months.
The business activity outlook index registered a neutral 50 in May.
“It reflects a cautious but steady outlook, where companies will likely continue operating at their current levels without significantly changing their strategies or operations,” Loh said.
“The feedback from survey respondents provides a nuanced view of the local economic sentiment,” he said.
“Comments such as ‘the market remains solid’ indicate a general sense of stability and ongoing demand. However, other remarks like ‘demand seems to be weakening but prices of some materials are still pretty high so we feel squeezed’ highlight the pressures businesses face from high input costs amidst stable or declining demand.”
Those sentiments “underscore the balancing act companies must perform to manage costs while maintaining competitiveness in a potentially tightening market,” Loh said.
The Jacksonville purchasing manager’s index for May was slightly higher than the national PMI of 48.7, calculated by the Institute for Supply Management.
“The national report highlighted that U.S. manufacturing activity remained in contraction after brief growth in March, with softening demand, stable output, and accommodating inputs,” Loh said.