Job Prospects in IT, FS, Hospitality Remain Bleak in `09’,
 Jobs in Them dipped by 38% in Oct.-Dec. `08: ASSOCHAM

The Associated Chambers of Commerce and Industry of India (ASSOCHAM) has predicted bleak prospects for jobs in IT, financial services and hospitality in 2009, arguing that between October-December 2008, average job creations dipped by 38 per cent compared to July-September of 2008.

In July-September 2008, growth in jobs on an average grew at 124 per cent which have registered a growth of 238 per cent in April to June 2008, points out the ASSOCHAM assessment.

ASSOCHAM Assessment on Placement Pattern (APP) between October-December 2008 reveals that in this quarter most of the sectors were reeling under the pressure of global recession, demand slowdown and credit crunch at domestic front and adversely affected growth of  jobs.

The Chamber measured creation of new job opportunities across sectors through data tracked on various job portals, has given thumbs down to vacancies in the one-time booming sectors such Aviation, logistics, media, IT, hospitality and retail.

The overall slowdown in the economy has seriously impacted the job creation capacity of certain industrials sectors. Continuation of this trend for a longer term may wash away the benefits generated from the four years of above 8 per cent growth, pointed out the Chamber.

The IT sector which accounts from 35 per cent of the total job creation, witnessed a steep fall of 46 per cent in October to December quarter as compared to the sequential rise of 455 per cent and 484 per cent in the second and third quarter of the calendar year 2008.

As the IT sector struggles to keep its order book intact, it has lost its dominant and share of the job market. In the wake of recent events such as Satyam fall out, the employment outlook in IT sector stands bleak in coming months as well.

The insurance business has been affected due to downward movements in the interest rates, meltdown of stock markets and general slowdown in the economy.  The sector posted 37 per cent fall in the last quarter of the year 2008 as compared to more than 100 per cent sequential growth in previous two quarters. A further dip is expected in the first quarter of the year 2009 as the sector is not expected to revive its growth rate.

The ‘Financial Services’ sector including NBFCs, mutual funds, brokerage firms, investment advisory, financial consulting, has been significantly affected by the global meltdown. The sector recorded 162 per cent sequential growth in the quarter ending June over the first quarter of January to March 2008. The growth rate dipped to 13 per cent in the third quarter ending September. In the last quarter of the year, as the industry major crisis, the vacancies posted dropped by 21 per cent.

The outlook for next two quarter is negative as most of the financial service continue deal with volatile markets and resort to cost-cutting measures. APP estimates further drop in the employment generation pace in the financial services sector.

The hospitality sector came under the severe strain in the second half of the calendar year 2008 due to slowing business growth and reduction in foreign tourists. During the second quarter (April to June 2008), the hospitality sector posted 245 per cent rise in the job vacancies posted across India. The growth level fell to 157 per cent in the quarter ending September. However, the recession worsened in the countries like US, Europe and Japan leading to negative growth in tourists arrival in the month of November.

Likewise, the job creation in hospitality sector also witnessed down turn in last quarter of the year 2008 and dipped by 43 per cent.   Although the government is taking a number of measures to revive the employment-oriented sector including expected rise in budgetary support to ministry of tourism, building additional tourist infrastructure, the employment outlook is expected to remain bleak and the next quarter (January to March 2009) may witness further fall in the job creation.

The construction sector accounts for 2.5 per cent share of the total job vacancies posted and are among the top ten employment generators. The employment generation in the sector took hit as the work on large number of housing, commercial spaces, SEZs projects faced difficulties due to shortage of funds.

In the April to July quarter, job vacancies in construction registered healthy sequential growth rate of 227 per cent, in the subsequent quarter it fell to 51 per cent and 12.5 per cent. The government had announced measures to revive the construction sector in two fiscal stimulus packages. The monetary measures taken by RBI in form of rate cuts are also expected to boost the sagging demand. The job outlook in the construction sector is expected to retain positive growth at the same pace seen in last quarter of the year 2008.

SECTORAL SUMMARY

- News Agencies