Still Waiting For A Technology Upturn

ByJohn S. McClenahen An 18.3% increase to $6.3 billion in new orders for communications equipment in July wasn't enough to convince Bruce Steinberg that the technology sector is finally coming out of its economic slump. "The tech sector remains very weak," says Merrill Lynch & Co.'s chief economist, noting that computer orders fell 4.1% in July and orders for semiconductors plunged 26%. He figures that spending on technology fell at a 16% annual rate during the first half of this year, the steepest decline, he says, on record. "Further cuts appear to be occurring in the third quarter, but probably not as deep as during the first half," says Steinberg. "U.S. growth will remain sluggish until the tech sector turns. We assume that will begin to occur during the first half of next year."