Manufacturing activity in Jacksonville picked up in June but area companies are uncertain about the future, 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 registered 54.2 in June. A reading above 50 indicates expansion and a number below 50 indicates contraction.
“June’s reading suggests that local manufacturers remained on a positive growth path despite an increasingly uncertain business environment,” UNF economist Albert Loh said in a report on the survey of manufacturers in Northeast Florida.
“The expansion was supported by solid gains in production, new orders, new export orders, order backlogs, input purchases, and materials inventories, indicating that demand remained healthy and manufacturers continued to build for future activity,” he said.
“Although employment and the business outlook softened slightly, manufacturers generally continued operating from a position of strength.”
The survey’s Business Activity Outlook Index registered 49, indicating that manufacturers expect a slight decline in activity in the next 12 months.
“Survey respondents described steady demand but shrinking profit margins due to rising costs, noted that customers are taking longer to commit to larger purchases, and observed that trade uncertainty is making it harder to plan inventory and shipping schedules months ahead,” Loh said.
“Others reflected concerns over high financing costs delaying investment projects, customers becoming increasingly price-sensitive, and companies growing carefully rather than aggressively.”
The Jacksonville PMI was in line with the Institute for Supply Management’s national survey, which produced a Manufacturing PMI of 53.3 in June.
Loh said the indicators in the Jacksonville survey provide reasons for optimism about the Northeast Florida economy but with caution.
“While fears of a broader economic slowdown or recession have not yet translated into declining manufacturing activity in Jacksonville, they remain important risks that businesses will continue to monitor closely over the coming months,” he said.