Purchasing Managers Report Shows Economy GainingPurchasing Managers Report Shows Economy Gaining

Another report, this one from purchasing agents, confirms the economy is on the rebound. According to a monthly survey by the Institute of Supply Management, economic activity among manufacturers grew in October, the fourth straight month its index rose.

The institute's Purchasing Managers Index stood at 57 in October, up 3.3 points from September. An index above 50 represents an expanding economy; one below 50 a contracting economy. Norbert Ore, chairman of the institute's manufacturing business survey, credits new orders as a significant factor behind the gain.

"This is the best report we've seen in quite some time in terms of the overall strength of manufacturing," says Ore, who's also group director for strategic sourcing and procurement at Georgia-Pacific Corp. "The picture continues to improve, and it appears that manufacturing will finish 2003 on a very positive note, assuming the recent trend continues."

ISM's PMI of 57 in October is an increase of 3.3 percentage points from 53.7 in September. Its new orders Index rose 3.9 percentage points from 60.4 in September to 64.3 in October. ISM's Production Index rose 5.3 percentage points from 57.3 in September to 62.6 in October. The ISM Employment Index is at 47.7 for October, an increase of 2 percentage points from 45.7 reported in September.

Of the 20 industries in the manufacturing sector, 14--including industrial and commercial equipment and computers--reported growth.

The government reported last week that gross domestic product soared at a 7.2% annual clip during the third quarter. Spending on IT wares rose 4.3% in the third quarter.