Manufacturing activity continued to contract in May in the Jacksonville area, with local companies pessimistic about the industry’s outlook, according to a monthly survey by the University of North Florida’s Local Economic Indicators Projects.
A Purchasing Manager’s Index derived from the survey registered 47.5 in May. A reading below 50 indicates contraction in Northeast Florida manufacturing activity.
“Subindices such as Output (45), New Orders (42), Employment (47), and Business Activity Outlook (43) all point to declining momentum and reduced confidence,” UNF economist Albert Loh said in his monthly report on the survey of manufacturing companies in the Jacksonville area.
“Companies continue to report weak demand, falling backlogs, and cautious hiring strategies, often opting for layoffs or hiring freezes,” he said.
Loh said subindices for Quantity of Input Purchases and Materials Inventories both registered 49, indicating only slight contraction. But “they reflect businesses scaling back procurement to align with subdued expectations.”
The Business Activity Outlook reflects expectations for the next 12 months and the low reading of 43 “shows that confidence among Jacksonville-area firms has significantly eroded,” Loh said.
“This diminished optimism likely stems from a combination of sustained cost pressures, weakening customer demand, and ongoing geopolitical and policy uncertainty, which collectively make long-term planning and growth strategies increasingly difficult for local companies.”
The index for manufacturing employment, at 47, shows more companies are reducing their workforce rather than hiring.
That data is in line with labor market data from the Florida Department of Commerce. While the most recent report showed overall employment growth in the Jacksonville area slowed to 1.3% in April, manufacturing was one of the few industries with a net decline in jobs, falling by 0.8% in the 12 months through April.
UNF’s survey of Jacksonville area companies mirrors results from the national survey by the Institute for Supply Management, which produced a Purchasing Manager’s Index of 48.5 in May.
“Nationally, ISM reported similar patterns: demand indicators remained weak, with slowdowns in new orders and backlogs, and factory output continued to decline despite modest improvement from April’s lows. Employment remained in contraction as layoffs persisted, and input conditions weakened amid slowing inventories and continued supplier delays,” Loh said.
“Price pressure, mainly driven by tariffs, remained elevated, although the pace of increase moderated slightly. Jacksonville businesses echoed these concerns, particularly around tariffs. These conditions are reinforcing an atmosphere of hesitation and reduced forward-looking investment, with firms describing the current business climate as highly uncertain.”