Signs of hope in the Jacksonville economy: These days, 'average' is good

News

by Karen Brune Mathis

Managing Editor

Jacksonville businesses are showing small signs of optimism about the area economy, according to a survey by CenterBank of Jacksonville.

While none of the businesses surveyed in the fall rated the local economy as excellent or even above average, more than 15 percent said it was average, almost double that sentiment last spring.

And a lower percentage, 60.6 percent vs. 69.2 percent, said it was below average.

Still, 24.2 percent said it was poor, not dissimilar from the 23.1 percent in the spring. None rated it above average or excellent in at least the past four surveys.

“The perception of Jacksonville’s local economy overall has shifted in a positive manner,” said the summary by CenterBank of Jacksonville.

Stephen Veniard, CenterBank senior vice president, said he was hopeful that the local economy will improve and that small businesses are optimistic enough to grow.

But he also said the survey shows the obvious.

“I don’t think there is any rapid recovery,” he said. “It is going to be a long, slow recovery.”

The national recession began in December 2007 and ended in June 2009, although the Florida recession lasted until at least early last year, according to some economists.

“What’s happening here, there’s not a lot of improvement, but some of the expectations are a little better,” said Veniard.

“But it shows the economy is struggling and things both nationally and locally are not great right now,” he said.

The fall/winter survey reflects business responses from September through December. Veniard said businesses based their responses on their economic conditions as of the second quarter of 2010, a year into the national recovery.

CenterBank produces the Small Business Trends and Expectations Survey with the Coggin College of Business at the University of North Florida. The reports were started in 2004.

The survey is sent to customers and databases of small businesses in the Jacksonville metropolitan area in a wide range of industries.

It asks about current, past and anticipated economic conditions in Jacksonville and the nation and among the respondents’ industries.

While the majority of businesses surveyed said the local economy was below average, an

even larger share said the same about the national economy.

Of respondents, almost 67 percent said the national economy was below average, about 30 percent said it was poor and only 3 percent called it average.

Comparing the local economy last fall vs. last spring, local businesses said conditions had improved, with more than 24 percent saying it was moderately better, up from 15 percent in the past survey.

Similarly, a lower percentage, at 33 percent, said it was moderately worse, down from almost 39 percent.

None said it was substantially better.

However, asked about their specific industry conditions, there was an increase in those saying it was the same and those saying it was moderately

worse.

Yet, far fewer said it was substantially worse from six months earlier. In the fall, just 9.1 percent said so, down from 15.4 percent in the spring.

Times clearly remained tough in the second quarter of 2010 in meeting financial expectations.

A majority of businesses said they did not meet revenue, profitability, capital investment or job creation expectations.

Still, there’s a general expectation of better times ahead.

For the first time since the last quarter of 2008, some businesses, 3 percent, expect the Jacksonville economy to be “substantially better.”

And fewer expect it to be “moderately worse,” about 6 percent vs. about 10 percent.

Yet, 3 percent expect it to be “substantially worse,” while none said so in the spring.

The majority, almost 90 percent, said both in the spring and the fall that they expected the local economy to remain the same or become moderately better.

The largest share of respondents said in the fall that the most challenging aspects of running their businesses were managing cash flow, with 39.4 percent saying that was the most challenging aspect, followed by staying ahead of competitors and managing long-term growth.

Last spring, the top two challenges, tied at 28.9 percent, were managing cash flow and financing new business opportunities, followed by cost management.

According to the survey:

• Three of five respondents said the Jacksonville economy, as of midyear, was below average, while almost one in four said it was poor.

• One in four said the economy was moderately better than six months before, while one in three said it was moderately worse. Another 27 percent said it was the same, and 15 percent said it was substantially worse.

• Looking ahead six months, four of 10 respondents said they expect a moderately better economy, while almost half, about 46 percent, expect it to stay the same.

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Economic trends and expectations
Businesses surveyed September-December

Describe the current Jacksonville economy

• Below average 60.6%

• Average 15.2%

• Poor 24.2%

• Excellent or above average None

Describe the current national economy

• Below average 66.7%

• Poor 30.3%

• Average 3%