U.S. Diversified Manufacturing: 2010 Outlook
- By Editorial Staff
- Published 18 January 2010
The number of negative rating actions for the U.S. diversified industrials sector is likely to be much lower in 2010 than in 2009 as rating trends are expected to stabilize. A return to economic growth across many regions, the gradual completion of restructuring and downsizing programs, issuers' focus on stronger balance sheets, and a more stable operating environment compared to the early phase of the global recession will all contribute to more stability in 2010. The pace of ratings downgrades in the broader U.S. corporate bond market slowed materially in the third quarter of 2009, which would be consistent with expectations for a slowly improving global economy and better performance by most companies in the diversified industrials sector. Currently, Negative Rating Outlooks among diversified companies rated by Fitch significantly outnumber Positive Outlooks, but as issuers repair their credit profiles, Negative Outlooks could be revised to Stable and upgrades could increase.