A monthly survey of Jacksonville area manufacturers by the University of North Florida’s Local Economic Indicators Project found activity contracting for the sixth straight month, with respondents not optimistic about improvement in the coming months.
A Purchasing Managers’ Index derived from the survey of manufacturing businesses in Northeast Florida registered 48.7 in August, with a reading below 50 indicating contraction.
The survey’s Business Activity Outlook Index was at 45 in August, indicating pessimism about the next 12 months.
“While some respondents described the current marketplace as ‘stable, pending more certainty on tariff issues,’ the overall tone shows businesses are bracing for challenges ahead,” UNF economist Albert Loh said in his monthly report on the survey.
“Confidence is a key driver of investment and hiring, so this lower reading suggests companies are likely to stay cautious with expansion plans and capital spending,” he said.
The survey’s Manufacturing Employment Index registered 45, signaling a contraction in jobs.
That’s in line with the monthly labor market report from the Florida Department of Commerce, which has shown several months of declining jobs in the manufacturing sector in the Jacksonville area.
One area of expansion in the UNF survey was new orders for goods, showing stabilization of demand, Loh said.
The manufacturers also reported stability in export orders and inventories.
“Overall, the data reflect a local economy that is stuck in a cautious holding pattern,” Loh said.
“The region’s strong logistics base and port infrastructure could also help local firms stay resilient if global trade improves,” he said.
“However, significant concerns remain: tariffs are driving up the costs of raw materials such as steel, aluminum, chemicals, and packaging materials; customers remain hesitant to commit to large projects; and construction activity is weak, weighing on demand,” he said.
“Combined with contracting employment and thinning backlogs, these challenges reflect the risks of a potential recessionary environment.”