Panorama Second Quarter 2014

We start this first 2014 Panorama dedicated to our global sector barometer, which assesses credit risk by key economic sectors in three of the world’s major regions.

North America remains on track, with companies posting constantly improving results. Their confirmed financial strength stabilises sector risks at relatively comfortable levels. In Western Europe, the return to economic growth may only be gradual, but it is real. Without making any major changes, we note that sector risks tend to stabilise, particularly in the countries most affected by the last recession. Finally, Emerging Asia is now a cause for concern. The economic slowdown in China reveals structural difficulties that impact corporate profitability. Sectors suffering from overcapacity must inevitably restructure and this unavoidable process carries with it higher risks. The risk assessment of the metals industry, which epitomises every possible excess, has deteriorated in this environment.