The Hindu : Karnataka / Bangalore News : Global financial crisis rattles IT industry

Online edition of India's National Newspaper
Thursday, Oct 30, 2008
ePaper | Mobile/PDA Version

Karnataka

Karnataka - Bangalore

Global financial crisis rattles IT industry

Staff Reporter

Marked decline in the rate of employment and manpower utilisation
Government urged to contain spiralling real estate prices

BANGALORE: As the Indian IT industry reels under the pressure of the global financial crisis, an Industry Monitor Survey released on Tuesday finds a marked decline in the rate of employment and manpower utilisation by 3 to 5 per cent during the first half of the current fiscal.

While the bi-annual survey, conducted by the Confederation of Indian Industry-Southern region, reflects “mixed trends” for the information technology sector in Karnataka, it shows positive growth in the engineering and electronics industry, and moderate growth in the automobile and steel industry.

In the IT services industry, there has been a 3 per cent decline in pricing.

Profit margins are expected to go down to 3 per cent owing to a weaker rupee. However, industry revenue and overseas billing has increased by 5 per cent compared with the period between October 2007 and March 2008.

Reflecting opinions of senior executives across industries, the survey lists decline in demand in the U.S. and Europe and decrease in skill levels of workforce as major industry concerns.

To boost the domestic IT demand, industry leaders have urged the Government to contain spiralling real estate prices.

The survey of the top five sectors, based on their contribution to the State Gross Domestic Products, was carried out in Andhra Pradesh, Karnataka, Kerala, Puducherry and Tamil Nadu.

Electronics industry

The electronics industry in Karnataka has seen an increase of 5 to 7 per cent in production, and a consequent increase of nearly 7 per cent in sales.

Exports have also increased by 2 per cent. Similarly, the engineering industry has recorded an increased production of at least 5 per cent and increases sales by 8 per cent in the same period.

It expects up to 8 per cent increase in demand and up to 3 per cent increase in exports during October 2008-March 2009.

The State’s automotive and auto components industry has registered a moderate performance during April 2008-September 2008, compared with the previous six months.

While production has gone up by 5 per cent, production value and inventory levels have increased by at least 10 and 2 per cent respectively. The industry expects up to 8 per cent increase in production and sales.

The steel industry has seen 5 per cent growth in production, capacity utilisation levels and sales, and up to 15 per cent increase in value of production.

It expects mixed trends in its performance parameters during the next six months.

Printer friendly page
Send this article to Friends by E-Mail

Karnataka