the other side of outsourcing

Following up on my recent immigration/emigration post: it appears that the U.S. economic slowdown is leading American jobs lost overseas to be lost – overseas:

That does not mean the emerging world is buffered completely, particularly if both the United States and Europe slip into recession or if the financial crisis in the United States claims more and bigger financial institutions. And without question, sectors of emerging economies are already being stung.

There is growing fear especially in the fastest-growing Indian technology markets, which include outsourcing, back-office operations and call centers. Those sectors are 70 percent dependent on the United States. Several Indian technology companies have slowed their hiring because of the U.S. economy’s slowdown. In May, industrial output was up 3.3 percent, half the 6 percent increase in May 2007.

“I will have to lay off more if things don’t pick up,” said Rajiv Prem, a clothing manufacturer for U.S. retailers, including Anthropologie and Motherworks, who said the drop in orders has meant he had to close two of his three factories outside New Delhi.

Exports in China — the darling of the 21st-century economy — are also being hammered by slackening demand caused by the global slowdown and rising labor and material costs. Chen Gong, who runs a factory that makes plastic cleaning devices in Ningbo, a manufacturing city near Shanghai in the Yangtze River delta, has seen profits slip partly from the yuan’s controlled but steady rise against the dollar. It has slashed profit margins for many mid-size manufacturers from 15 to 3 percent. Many factories in nearby Guangdong province have closed their doors, and thousands of workers have lost their jobs.

“We’ll just see who can survive this,” Chen said. Experts predict as many as one-third of export manufacturers will close in the next three years.

Ultimately, that might not turn out so bad for China

Chinese exports to the United States have been flat this year and will likely experience a rare, overall decline by year-end, said Arthur Kroeber, managing director at Dragonomics, a research firm in Beijing. Yet experts said that might be exactly what China needs. A global slowdown — if tempered — could help China stage a soft landing for its breakneck economic growth.

“In some ways, this is not only welcome but desired by the Chinese,” said Vikram Nehru, the World Bank‘s chief economist for East Asia and the Pacific.

However,

Yet in Europe and Japan, the situation is decidedly more gloomy. In Japan, a new government forecast shows slowing economic growth and rising inflation in the coming year….

In Europe, which analysts once hoped would be a pillar of economic strength in the event of a U.S. recession, analysts are now warning of possible recession. The weakening dollar has made German chemicals and cars exceedingly expensive overseas — particularly in the United States — stinging the manufacturing industry in the euro zone’s largest economy. Spain, Ireland and Britain are mired in painful housing slumps with their financial institutions squeezed by the U.S.-sparked global credit crunch.

So to reiterate, chances of American emigration for better employment: still not likely.

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2 Responses to the other side of outsourcing

  1. SEO staff says:

    If the world faces global recession, there is a tendency that the world will suffer for the unbalanced economy that US is facing right now. the weakening dollar has already made a low impact in the global economy and the rest of the curriences are stunned by this financial crisis. The number one cause of this is the oil, if the industrial experts finds a way to replace oil to water(H20) as a source of energy. Then we might find ways to decrease the problems in the global market that may somehow face global recession.

  2. SEO staff says:

    If the world faces global recession, there is a tendency that the world will suffer for the unbalanced economy that US is facing right now. the weakening dollar has already made a low impact in the global economy and the rest of the currencies are stunned by this financial crisis. The number one cause of this is the oil, if the industrial experts finds a way to replace oil to water (H20) as a source of energy. Then we might find ways to decrease the problems in the global market that may somehow face global recession.

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