NEWTON, MASS. – One word continues to describe the economy and its outlook for 2003 – "mixed." Add the word "cautious," and you have the opinion of industry professionals that 2003 holds a mixed bag of economic news for most sectors.

A report by Thomas Register, the Industrial Purchasing Barometer Survey released in January, indicates that buyers are "proceeding cautiously and buying only what they absolutely need." Only 20 percent have returned to "business as usual."

Ruth Hurd, publisher of the Thomas Register, said economic turbulence in 2002 didn't help industrial performance, leaving buyers more skeptical than they were in November, 2001. At that time, 46 percent thought they would return to their usual purchasing levels.

Some good news: the Purchasing Managers Index, released monthly by the Institute for Supply Management, gained 5.5 percent to 54.7 in December, a huge jump considering it had hovered at or below the breakeven mark of 50 for five months. The last positive jump of this size occurred last June.

"The question is … whether the manufacturing sector can continue to gather momentum during the first quarter of 2003," said Norbert Ore, chairman of ISM's Manufacturing Business Survey Committee.

Chuck Stockinger, executive director of the Industrial Supply Manufacturers Assn. based in Cleveland, Ohio, predicts an industrial turnaround in the second half of 2003, with overall growth for the year of three to four percent.

"People are operating hand-to-mouth, buying only what they need right now," Stockinger said, agreeing with the Thomas Register survey results. "However, by late spring or early summer, I expect to see recovery well under way. I am cautiously optimistic."

The first half will be flat to a two-percent gain in some areas, Stockinger said, noting that cutting tools, abrasives, power tools and hand tools are some of the areas he expects will revive by summer.

A recent survey of middle-market companies, loosely defined as having sales between $20 million and $499 million yearly, also revealed lowered expectations for the economy in general. Grant Thornton, an accounting, tax and business advisory firm, found that the number of optimistic leaders fell drastically in November, to 51 percent from 80 percent in May.

Brad Gabosch, managing partner of Grant Thornton's consumer and industrial products practice group, is another person who is "cautiously optimistic" about the manufacturing economy.

"Overall, the manufacturing recovery is continuing, but not at a robust pace," Gabosch said. "The fact that the general economic climate is so uncertain doesn't help and while consumer spending has remained healthy, that alone will not be enough to sustain a significant recovery in the manufacturing sector."