UNF survey: Key First Coast manufacturing indicators show ‘softening’ in economic picture

Angie Moorefield unfolds material to begin sewing a disposable gown at Burlington Medical in (Jonathon Gruenke/The Virginian-Pilot via AP)

Northeast Florida’s manufacturing sector appears to have softened in March, as key elements are prompting concern.

The University of North Florida (UNF) Coggin College of Business monthly Jacksonville Economic Monitoring Survey showed contraction in several indicators last month. Manufacturers on the First Coast saw contraction in new orders, backlogs of work, finished goods inventory and employment in March when compared to the February numbers.

“In March, Jacksonville’s Purchasing Managers’ Index (PMI) registered 49, matching the national PMI figure,” said Albert Loh, UNF Coggin College Interim Dean who oversees the UNF monthly manufacturing report.

“A PMI below 50 signals contraction, indicating that the local manufacturing sector, like the nation’s, is facing softening conditions. This reading reflects a marginal decline in overall business activity, ending the modest expansion seen in prior months.”

The UNF business college conducts monthly surveys of First Coast manufacturers to determine production levels and other factors.

One of the most significant areas of contraction in North Florida manufacturing was in new orders. That factor dropped from 56 index points in February to 49 in March, the single largest index decline for any element in the survey.

Loh acknowledged that the notable drop in new orders among First Coast manufacturers does not bode well for the coming weeks and months.

“This means more local firms reported a decline in new orders than those reporting increases, which is often an early warning sign for future slowdowns in production, hiring, and revenue,” Loh said in the report.

“Since new orders fuel upcoming output, a reading below 50 suggests that companies may start scaling back operations if this trend continues, especially in manufacturing sectors. For Jacksonville, a city with growing logistics and manufacturing activity, sustained declines in new orders could ripple through supply chains and reduce demand for transportation, warehousing, and other support services.”

One of those ripple effects is backlogs of work among First Coast manufacturing. While the contraction in that area was not as dramatic as new orders, backlogs are dropping as that index fell from 48 to 46 last month.

Loh said that’s another key factor that raises concern.

“For Jacksonville’s economy, a decline in backlogs may suggest that companies are working through existing orders without seeing a corresponding uptick in new demand, potentially leading to lower utilization of capacity and a weaker business outlook,” Loh said.

Some sectors of First Coast manufacturing expanded in March, such as output, new export orders and suppliers’ delivery times, among others. But those areas expanded by only modest levels.