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World economies face risks in 2016

24 November 2015 Coface

In the context of low growth, global sectoral growth is mixed in North America, emerging Asia and in Western Europe.

Automotive :

The automotive sector is heading in the right direction in North America. Western Europe is taking the same path, but the Volkswagen scandal has cast a shadow, the consequences of which are not yet clear. Emerging Asia needs to meet the challenges posed by the slowdown in China's economic activity.

Energy:

A further fall in the price of oil has led Coface to downgrade the energy sector in the three zones, which now represent a high risk. The major oil groups are reconsidering their investments which is weakening oil service companies. In emerging Asia, the risk is lower while Western Europe is being negatively affected by cost and investment reduction plans. The sector is fragile in North America.

Metals:

The metals sector continues to face falling prices. However, in Western Europe the metal sector is benefiting from buoyant automotive sales. Emerging Asia, where the risk is still very high, is experiencing persistent major overcapacity and North America is being affected by the slowdown in oil investments.

There is a breath of optimism in the paper-wood sector, even with the question of overcapacity. Activity in this sector is sluggish in Western Europe. Emerging Asia is being buoyed by the transformation of wood for export but is still being hindered by the fall in paper consumption in North America.

ICT:

The only good news is from the ICT sector in Western Europe where demand is being buoyed by more vigorous private consumption. Coface considers risk to have fallen from high to medium. In emerging Asia, the ICT industry is still suffering from the economic slowdown in China, but other growth drivers exist. North America is facing strong competitive pressure.

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