Capitalmind
Capitalmind
Actionable insights on equities, fixed-income, macros and personal finance Start 14-Days Free Trial
Actionable investing insights Get Free Trial
Stocks

IT Falters, RE Stutters, Auto Flutters

Share:

Reuters thinks this is the end of IT Staffing as we know it. They quote a changing scene in IT, with headcount being shrunk while profits and revenues are increased – a sign that the business is lower margin than it seems. Projects are harder to come by, and require lesser of the “fresher” population and more of the experienced “lateral” junta. However, it seems like project sizes have shrunk as well, as it seems to have become quite difficult for middle-management people to find new positions.

Hearing the woes of freshers breaks my heart; those that had been given campus jobs in 2011 for when they graduated in 2012, and still have only seen postponements of joining dates. I was like them – a company had offered me a job on campus in 1995, only to send me a letter in 1996 that my joining date was delayed 3 months because they had divided the joinees into two batches. After they snubbed my efforts to substitute with a non-joiner in Batch 1, I told them to go take a hike, and joined a smaller company that paid half, but where I could join immediately. Anyhow, it sucks to have a job but not a paycheck.

Real estate seems to have been impacted. Commercial space has been hit, says TOI, with:

Figures provided by two property consultants — Cushman & Wakefield and DTZ — show that absorption of office space in 2012 across the top eight Indian cities stood at 29.05 million sq ft, a 23% decline over the previous year. Of this, the share of the IT sector, which accounted for 64% of the commercial space absorbed in 2009, dropped to 44% in 2012 at 13.22 million sq ft. It was 16.08 million sq ft in 2011.

Commercial rentals are one thing; the other worry is residential, where ownership has been backed, in many cities, by the rising tide of the IT industry. With a slowdown will people buy less? Will people upgrade less? Already, too many projects are delayed – and they will get seriously delayed if people aren’t paying up.

And of course, automobiles. Already, auto sales growth have been the lowest in a decade or so, and as jobs stagnate, will people stop buying new cars in the immediate future?

A slowdown will be good to both correct price anomalies and to increase the likelihood of a great longer term future for both jobs (why only IT?) and other industries.

Share:

Like our content? Join Capitalmind Premium.

  • Equity, fixed income, macro and personal finance research
  • Model equity and fixed-income portfolios
  • Exclusive apps, tutorials, and member community
Subscribe Now Or start with a free-trial