ATLANTA --- Mixed signals this week suggest the Georgia economy hasn't found its footing.

Factory managers are reporting more bullish signs in a survey released this week, but lenders say activity remains sluggish.

The state's purchasing managers index, released Monday by the Econometric Center at Kennesaw State University, rose 4.3 points to 48.9. A reading of 50 or better indicates economic expansion.

The national index stands higher at 55.7, rising 3.1 points, but the Georgia index is moving in an upward direction after falling in August and September. The university compiles the index by surveying plant executives. During October, 32 percent predicted production increases in the next three months to six months while 17 percent reported expectations of lower production.

"Manufacturing output increased at an annualized rate of 7.7 percent for the third quarter. Even after controlling for motor vehicle production, the increase was impressive," notes index author Don Sabbarese, the director of the Econometric Center.

Production at Georgia's banks, however, is down 1.7 percent from the end of 2008, according to figures released Monday by the Georgia Bankers Association during congressional testimony in Atlanta.

"One reason for that decline is that loan demand is down as more people are saving more to pay off debt and companies have put off expansions or additions to inventories," said Joe Brannen, the president of the association.

Many Georgia banks are struggling, Mr. Brannen said, to maintain reserves required by regulators before they can make more loans. One of every three banks in the state is under specific regulatory orders, he said.