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By Ian Fried, 21 November 2002 09:10

NEWS Technology spending is likely to remain suppressed even once the overall economy starts to pick up, according to a senior US advisor to President Bush, quashing the hopes of those looking for signs of an imminent IT recovery. Carlos Bonilla, special assistant to President George W Bush for economic policy, said: "It's hard to tell people to live with diminished expectations. Part of it is just coming back to earth and realising that the bubble was exactly that." Bonilla outlined what many in the audience have experienced firsthand: The economic recovery has been slow and halting, with consumer spending a lone bright spot amid continued declines in manufacturing and other areas. "Clearly this is an economy coming out of recession more slowly than anyone would like," Bonilla said. The prolonged falling-off in jobs in the manufacturing sector is an area of concern for technology companies, Bonilla said. "This is a sector that is going to use a lot of the products that the technology industry produces." Later in the keynote speech, he added: "You're not going to do much differently than the companies you are selling to." Bonilla said the size of the past overspending varies from sector to sector. "There is decades' worth of fibre optics out there," he said after the speech. "Elsewhere, there is just a lot of new capital, plant and equipment. As a consequence, [companies] won't feel any great urgency to go and replace it." But Bonilla's speech also held some good news. He pointed to an expected rise in chip sales next year, along with increases--albeit modest ones--in PC sales this year. "Several top tech chiefs say they've seen an increase in business in recent weeks," he said. Ian Fried writes for News.com