Computer Shipments Down In November

One government report last week put a damper on what appears to be an expanding economy, especially in the high-tech sector. The Commerce Department reported that orders for computers fell 1.2% in November compared with October, and shipments fell 4.2%. Orders and shipments for computer wares rose in October after falling in September. By comparison, overall durable-goods orders fell 1.4% in November, with shipments staying virtually the same as they did a month earlier.

On a positive note, inventories of computers continued to decline, by 0.2% in November, as manufacturers' warehouses thinned of IT wares. Inventories for all durable-goods makers also fell 0.2% in November.

The decline in computer orders and shipments represents a mere bump in a growing economy, says Knud Jacobsen, principal at the economic consulting firm Rational Perspectives and president of the Silicon Valley Round Table, a group of economists. Many business leaders remain gun-shy about investing in IT, he says, but if CIOs demonstrate the productivity benefits from spending, the locks to the coffers should come off. "Once CEOs realize they can be at the forefront of their industries," Jacobsen says, "there will be a demand for technology that will give them a specific edge against their competitors."