A monthly survey by the University of North Florida’s Local Economic Indicators Project found manufacturing activity continued to contract in the Jacksonville area in September, but manufacturers are more optimistic about improvement in the next 12 months.
A Purchasing Managers’ Index derived from the survey of manufacturing businesses in Northeast Florida registered 49.1 in September, the seventh straight month below 50.
A reading below 50 indicates contraction and an index above 50 signals expansion.
However, the survey’s Business Activity Outlook registered 53, indicating manufacturers are cautiously optimistic about business conditions in the next 12 months, said UNF economist Albert Loh.
The outlook index was at 45 in August.
“The modestly positive reading reflects a business community that is hopeful for improvement but aware of ongoing headwinds,” Loh said in his monthly report on the survey.
“Several respondents described operating in an environment where ‘margins are thin, and everyone’s cutting overhead to stay afloat,’ and where firms see ‘steady demand for our products but sales are flat compared to last year.’ These comments suggest that while companies are maintaining activity, they are doing so with a defensive mindset,” he said.
The survey’s Employment Index registered 46 in September, showing a decline in manufacturing jobs.
“This suggests that area manufacturers are exercising caution amid uncertain demand, trimming staff through attrition or limiting new hires to manage costs,” Loh said.
The survey showed production remained steady and inflation was mild, but the PMI index below 50 reflects soft demand and continued cost concerns, he said.
“Both local and national data point to a manufacturing economy operating at low gear, with most firms focused on efficiency, cost control, and maintaining operations amid market uncertainty,” Loh said.
The manufacturers are hoping for modest gains over the coming year as long as inflationary pressures, tariffs and global demand remain manageable, he said.
“The 53 reading (in the outlook index) represents confidence tempered by realism, pointing to a belief that gradual recovery is possible but not guaranteed,” Loh said.