A survey of Jacksonville area manufacturers revealed that the local economy continues to contract for a fifth straight month. Respondents do not expect conditions to improve over the next 12 months.
Contents
- 1 survey by the University of North Florida’s Local Economic Indicators Project
- 2 Business activity outlook
- 3 Business sentiment and Federal Reserve policies
- 4 Contrasting sector demand
- 5 national contexts and similar pressures
- 6 Northeast Florida manufacturers managing inventories
- 7 Tables and statistics
- 8 Conclusion
survey by the University of North Florida’s Local Economic Indicators Project
The Purchasing Manager’s Index (PMI), derived from the survey by the University of North Florida’s Local Economic Indicators Project, stood at 48.1 last August. Any reading below 50 in the UNF’s Jacksonville Economic Monitoring Survey indicates contraction, while a reading above 50 signals expansion.
Business activity outlook
Manufacturers surveyed were less optimistic than the previous month, with the Business Activity Outlook Index dropping from 53 in July to 50 in August.
Employment Stable
The survey’s Employment Index remained stable at 50 in August, indicating steadiness in the labor market. While there isn’t immediate growth in manufacturing employment, this can be seen as a positive sign, given broader economic uncertainties.
Business sentiment and Federal Reserve policies
“For the Jacksonville economy, this lack of growth expectation suggests that businesses are adopting a wait-and-see approach. This is influenced by factors such as economic uncertainty, consumer demand, and ongoing challenges in the labor market and supply chains,” stated UNF economist Albert Loh.
Loh also mentioned the uncertainty over when the Federal Reserve Board might cut interest rates is affecting the outlook. He remarked, “Higher interest rates can increase borrowing costs for businesses, potentially slowing investments in expansion and capital improvements.”
Contrasting sector demand
“On the other hand, some sectors, like technology, are experiencing strong demand. However, this positive factor may be outweighed by broader economic concerns, contributing to an overall neutral outlook,” Albert Loh noted.
national contexts and similar pressures
The Jacksonville survey’s findings align with the national PMI compiled by the Institute for Supply Management (ISM). The national PMI was at 47.2 in August, showing a slower contraction compared to previous months. “The ISM noted that demand remains weak, new orders and export orders are declining, and backlogs continue to shrink,” Loh added.
Northeast Florida manufacturers managing inventories
Jacksonville businesses face similar pressures to the rest of the country. However, the Stocks of Materials Purchased Index for Jacksonville was at 54 in August. This indicates that Northeast Florida manufacturers are managing inventories more aggressively. “These efforts reflect an attempt to balance uncertain demand with the need to keep operations running smoothly,” Loh concluded.
Tables and statistics
Here’s a summary of key statistics from the survey for your reference:
| Index | Value |
|---|---|
| Purchasing Manager’s Index (PMI) | 48.1 |
| Business Activity Outlook Index | 50 |
| Employment Index | 50 |
| Stocks of Materials Purchased Index | 54 |
| National PMI (ISM) | 47.2 |
Conclusion
In summary, the economic outlook for Jacksonville remains cautious. This is mirrored by the national trends and compounded by specific local factors such as inventory management and sectoral demand. The stability in employment and the prudent approach to material stocks are hopeful signs amidst the broader concerns.
For more detailed analysis or further information, you can visit the University of North Florida and the Institute for Supply Management.
