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Computer shipments, new orders decline

The Commerce Department says shipments of computers and related products dropped 10.5 percent from July to August--a discouraging sign for the IT industry.

In a discouraging sign for the information technology industry, shipments of computers and related products dropped 10.5 percent from July to August, the U.S. Department of Commerce said Thursday.

New orders for computers and related products fell 2.3 percent during the same period. August shipments totaled $7.67 billion, and new orders were valued at $7.96 billion.

Computers and related products--a category that includes computer storage devices and peripheral gear such as printers--suffered a worse downturn than the overall manufacturing sector. In general, new orders for manufactured durable goods fell 0.9 percent in August, to $173.3 billion, while shipments fell 2.9 percent to $176.3 billion, the Commerce Department said.

The report runs counter to more encouraging news about the direction of IT spending. Credit ratings company Standard & Poor's recently said the IT hardware industry is witnessing "modest and sporadic" signs of growth. Earlier this summer, research firms IDC and Gartner concluded that the PC market grew faster than expected in the second quarter.

On the other hand, a Goldman Sachs report last week found that U.S. businesses have continued to spend conservatively on technology during 2003. According to the financial services firm, a modest recovery is likely in 2004.

Shipments of computers and related products rose in both July and June, the Commerce Department said. New orders of the products also climbed in both months.

Regarding manufactured durable goods overall, new orders and shipments were down in August for the first time since April.

One bright spot in the report regarded chips. Shipments of semiconductors jumped 19.4 percent from July to August, to $6.32 billion. Semiconductor shipments had fallen 13 percent in July.