Government Says U.S. Tech Firms Recovering

WASHINGTON (AP) -- The U.S. technology industry is showing healthy growth for the first time since parts of the Internet sector collapsed two years ago, but jobs and wages still are down, the Bush administration says in a new report on the digital economy.

"This isn't another train coming. This really is the light at the end of the tunnel," Phil Bond, undersecretary for technology at the Commerce Department, said Monday. "Technology is firmly on the comeback trail."

In the report, due for public release Tuesday, the government predicted steady but moderate growth among technology companies and said technology investments are helping fuel growth in other areas. Manufacturing plants with computer networks, for example, are more productive than those without, even taking other factors into account.

But the report also said technology employment is recovering slowly. It said the number of technology workers dropped by 11.2% since 2000 to 4.8 million employees--compared with a decline of less than 2% in all private industries.

Average annual wages among technology employees dropped in 2002 to $67,440--down 1.3% from $68,330 the previous year--even though average wages for all private-sector workers increased by 1% to $36,520.

"Tech is back," said Harris Miller, head of the Information Technology Association of America, a leading trade group. "It's not back to the levels of the bubble, but clearly tech spending is coming back in a meaningful way."

The report said computer and semiconductor makers are rebounding from major losses over the previous two years, but communications equipment makers are still having problems.

The administration said sales by U.S. technology companies and their overseas affiliates topped $1 trillion in 2002, despite a record foreign trade deficit. It said that combination apparently was the result of U.S. companies using offshore production, a controversial trend.