Oct 31, 2008

Jobs and the India slowdown story

Business Today publishes an interesting survey. Take a look:

According to the latest BT-TeamLease Employment Outlook Survey (October-December 2008 quarter), the caution visible in the last quarter has turned into a decisive downturn—both in hiring and business sentiment. The Employment Outlook is down 10 index points. Employers are in the wait’n’watch mode. The result: hiring activity is likely to be sluggish in most sectors—IT, infrastructure, retail, FMCG & media, financial services, telecom and manufacturing & engineering. ITES is the only sector that is buoyant, according to the survey. However, this buoyancy has turned into caution after the Wall Street crash because many companies depend on the now sick US financial services companies for major portions of their revenues. The survey, incidentally, was conducted before the crash.
he hiring outlook for cities across the spectrum has taken a beating. The survey puts Job Outlook for Mumbai at 60 index points, down 15 points compared to the previous quarter. Ahmedabad, Bangalore and Delhi see a dip in the fortunes with the cities posting declines of 40, 16 and 10 index points, respectively. Chennai’s bad run also continues with a drop of 10 index points. The only city that has a positive Job Outlook is Hyderabad, which, incidentally, witnessed a drop of 31 index points in business sentiment. 

On the other hand, blogger and exec search consultant AK Menon posts :
Rama Bijapurkar's prognosis on consumer spending is a revelation!! Her take: Consumer India is a hydra -headed monster-and consists many demand segments or "mini Indias"and each of them is not as badly hit by the US recession!! The news on the overall consumer demand is better than we think it is!
-there are some 85 million farmers and their families -who have had a good monsoon and crop and recent loan write-offs.
-there are 5-7 million government -and quasi government employee families who are laughing all the way to the bank!
( Both these segments by far out number the 20 million affected by stock market or the 2 million in IT/ITES sectors with shaky jobs and low confidence!!)
-This is probably the first time that the rich are getting hurt more than the poor-but they have the resilience to ride through-especially since most of them are hurting on account of being the most over leveraged!
-And finally- as the top 20% of India accounts for about 43% of consumer spending-the bottom 60% for about 36% -the mass may be safer than the class.