Factory Gauge And Tech Spending Jump, Adding To Evidence Of A Swift Recovery; Shaking Off Dot-Com Excess; Tech companies seeing double-digit rise in orders for first time since 2000.(A)

Byline: BRIAN DEAGON

Two reports out this week forecast a rise in tech spending in 2004 after two years of record declines. It's more evidence that the tech industry is on the path of sustainable recovery.

But the strongest evidence came out last week. Business spending on computers and software rose 6% in the third quarter and 15% on an annualized rate, according to the Commerce Department.

And new orders for information technology jumped a sharp 18% last month from a year ago, as tech firms continued to draw down their inventory.

Tech companies have shaken off much of the excess inventory left after the dot-com bust. They're seeing double-digit increases in new orders for the first time since early 2000.

"The tech sector is again leading the economy," said Mat Johnson, chief economist at Quantit Economic Group. "We're seeing a continued rise in IT investment."

Johnson expects business spending on information technology this year will rise 8% to $432 billion.