Global recession hits Karnataka IT industry

BANGALORE: The global economic crisis has started showing its impact on the information technology industry, according to the recent industry monitor survey conducted by the Confederation of Indian Industry (Southern Region).

According to the CII bi-annual report published on Tuesday, Karnataka’s IT industry has witnessed a fall of about five percent in manpower utilization and employment levels dropped by three to five per cent.

There was also a decline of 2-3 per cent in pricing (billing) during the first half of the current financial year as against the second half of the last financial year, the survey report said.

The weak rupee is likely to cause a slide in the profit margins during April-September 2008. However, IT industry revenue and overseas billing increased by five per cent during this period compared to the second half of the last financial year.

Likewise, industry leaders predict that demand for services from the IT sector would go up by five per cent during October 2008 - March 2009 and revenue would also go up by three to five per cent. Overseas billing during this period may go up by three per cent during the period, according to industry experts.

The decline in demand due to the economic crisis in the US and also the decline in demand from other regions like Europe is also a major concern for the industry, the CII report says.