Coface Sector Review: Credit Risk Eases for Automotive and Retail in North America, and the Services Industry in Asia
In its most recent Panorama economic publication, global credit insurer Coface reviews 14 key sectors in North America, Emerging Asia and the European Union. Coface’s sector analysis is based on a unique indicator1, developed by Coface economists and reflecting the payment experience of companies reviewed by its underwriters. The Panorama also takes a detailed look at the textiles industry in Europe.
Sector Risk Review
- In North America, automobile and retail risks eased from ‘medium' to ‘moderate.’ Theautomobileindustry has seen new car sales return to pre-crisis levels, boosted by the need to replace older vehicles. As a result, automakers’ cash flows have increased 19% over the last year. In the Canadian and USretailsector, sales have risen 3.9% for online and traditional retailers over the last year, supported by increased household spending.
- In emerging Asia, Coface sees the credit risk of theservicesindustry as ‘moderate.’ Sales and profitability have increased in corporate services, notably IT and engineering. Across the region, the emergence of a Chinese middle class is boosting tourism in Asian countries, a trend that will benefit from rising Chinese consumer income in the years ahead.
- In Western Europe, risks are broadly stabilizing as the eurozone climbs out of recession. But sluggish domestic demand in Southern Europe is affecting European sector risks, and no sector has ‘moderate’ credit risk.