The news about the Chinese economy has been grim at best lately and conjures up the image of a slow boat. This has lead to what most economists and analysts agree is an appropriate response from the largest global banks as they are all cutting their growth forecasts for the world’s second-biggest economy.

The analysts downgrades will likely intensify investors’ concerns about fallout in the rest of Asia. Asia exports have been in a free fall from the euro-zone debt crisis and the weak U.S. recovery, while domestic growth also slows.

UBS on Friday lowered its forecasts for China’s GDP growth to 7.5% from 8% for this year, putting it among the most bearish of banks that have recently downgraded their 2012 China outlooks. For next year, UBS sliced its outlook to 7.8% from 8.3%.

That followed less than 24 hours after Goldman Sachs Thursday cut its forecast for this year’s growth to 7.6% from 7.9% and for 2013 to 8% from 8.5%.

China’s GDP grew 9.3% last year, so the expected slowdown doesn’t mean China’s economy is falling off a cliff, but it is still a significant slowdown.

The Chinese economy has a habit of beating expectations. For ten years from 2001 to 2010, its growth rate exceeded the IMF’s spring forecast, often by a big margin. But this year it looks like it will disappoint. In recent months, industrial output has slowed sharply; stocks of unsold goods are piling up; and Shanghai’s stock market is at a three-year low. For the first time this century, in 2012 China’s growth rate may dip below 8%. With the world ever more dependent on China’s economy this is a real problem and is what is part of the rationale behind the recent analyst downgrades.

The lower projections from the large banks for 2012 bring them closer to Beijing’s view, which typically underestimates growth.

Premier Wen Jiabao set this year’s official GDP growth target at 7.5% in a symbolic gesture to sharpen the country’s focus on the quality, rather than speed, of economic expansion. China had for the prior seven years set its growth target at 8%, though the economy outpaced that rate every year, even in 2009.

China’s central bank has cut interest rates twice this year and pumped liquidity into the banking system. The government has also been boosting spending on highways, subways and other infrastructure projects. The effort so far is a far cry from the massive stimulus program it unleashed in 2008.

Still, there are concerns that Chinese authorities might not offer enough stimulus fast enough to counter head winds generated from a policy clamp down on the property market that has also depressed activity.

Goldman Sachs said new spending plans may be delayed in the near term by Beijing’s once-a-decade leadership transition this year and lags in implementation.

Morgan Stanley figures risks in Asian markets have increased. Among the evidence, it notes leading indicators such as Chinese electricity usage, local cement prices, and freight rates, which suggest investment risks in Asia will remain elevated.

 

 

Cross Posted from myCFOview.com 

Get ready to pay your IT workers. They have been waiting patiently.

 

A global downturn in economic activity resulting in shrinking IT budgets, the financial crises of 2008, and IT outsourcing or offshoring are just a few of the potential major career disruptions IT workers have had to contend with over the last five years. It workers recognized the need to embrace their jobs because if they were let go there was great uncertainty in the prospect of finding a new job. 

 

A recent increase in IT professionals' confidence in the economy was largely led by a perception of more jobs being available and an increased ability to get those new jobs. Mirroring this increase in confidence is a decreased belief that IT pros will lose their jobs within the next 12 months.

 

Therefore IT career options are starting to improve according to this recent survey of IT professionals from Technisource.

 

 The company's latest IT Employee Confidence Index reveals that optimism levels have climbed above 50, after dipping below that critical mark in 2011. Overall, tech workers feel better about job security, employment-search prospects and the future of their organizations. 

 

"With the demand for IT professionals steadily increasing, confidence is rising once again," says Andrew Speer of Technisource. "We're seeing great demand for project managers,  analytics professionals and .NET application developers, demonstrating that companies are opening their budgets and embracing technology implementation." And one-third of employees are actively looking for new employment, Speer notes, meaning CIOs and other tech managers must focus on the needs of IT teams to avoid unnecessary hiring and re-training costs. More than 245 IT professionals took part in the research.

 

 

Here are some selected highlights from the Q4 IT Employment Report:

 

1. 22% of IT professionals believe the economy is getting stronger, up from just 13% the prior quarter.

 

2. 8% of tech workers believe more IT jobs are available now, up from 11%.

 

3. 42% of tech employees are confident in their ability to find a new job, up from 40% the prior quarter.

 

4. 63% of IT workers remain very confident about the future of their current employer, a slight increase.

 

5. Just 16% of IT employees believe they are likely to lose their jobs, down from 19%.

 

 

Published by myITview.com

 

According to Bloomberg Businessweek, a recent survey of CFOs finds that 90% expect growth in their organizations, however there seems to be difficulty in finding and retaining the talent to make it happen.

The research suggests that effective mangers are the link to drive employee productivity.

 

 It has been found that: 

 

Effective managers can increase retention level of direct reports by 40% and performance levels by 25%.

 

Managers spend on average 21% of their time developing direct reports, however only 42% of managers are effective at employee development.

 

Due to restructuring and layoffs driving the economic downturn managers have, on average, 61% greater span of control.

 

With aggressive top-line growth targets, these overstretched managers are expected to do more with less, leaving even less time to develop their employees.

 

This de-prioritization of employee development is a key driver in the erosion of productivity that totals nearly 12% of potential employee output.

Occupy Wall Street Crowd Blind to Benefits of Capitalism

By Gary Wolfram

William Simon Professor of Economics and Public Policy 

Hillsdale College

Whenever I watch media coverage of another Occupy Wall Street event I am reminded of an exchange between Jewish protesters in the 1979 Monte Python movie Life of Brian. One of the protesters asks another what the Romans have brought to the area and the conversation goes like this: