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Macroeconomic, Country Riskand Global Sector Outlook
Economic Outlookno. 1217-1218May-June 2015
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Riding into risksor recovery?
Economic Research
Economic Outlook no. 1217-1218 | May-June 2015 | Macroeconomic, Country Risk and Global Sector Outlook Euler Hermes
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Economic Research Euler Hermes Group
Economic Outlookno. 1217-1218Macroeconomic, Country Riskand Global Sector Outlook
Contents
The Economic Outlook is a monthlypublication released by the EconomicResearch Department of Euler HermesGroup. This publication is for the clientsof Euler Hermes Group and available onsubscription for other businesses andorganizations. Reproduction is authorised,so long as mention of source is made.Contact the Economic Research Depart-ment Publication Director and Chief Eco-nomist: Ludovic Subran Macroeconomic Research and CountryRisk: David Semmens (Head), FrédéricAndrès, Andrew Atkinson, Ana Boata,Mahamoud Islam, Dan North, DanielaOrdóñez, Manfred Stamer (Country Econ-omists)Sector and Insolvency Research:Maxime Lemerle (Head), Farah Allouche,Yann Lacroix, Marc Livinec, Didier Moizo(Sector Advisors)Support: Matthew Anderson, Irène Herlea(Research Assistants)Graphic Design: Claire Mabille Photo credit: Allianz, ThinkstockFor further information, contact theEconomic Research Department ofEuler Hermes Group at 1, place desSaisons 92048 Paris La Défense Cedex– Tel.: +33 (0) 1 84 11 50 46 – e-mail:[email protected] > EulerHermes Group is a limited companywith a Directoire and SupervisoryBoard, with a capital of EUR 14 509 497,RCS Nanterre 552 040 594 Photoengraving: Talesca Imprimeur deTalents – Permit May-June 2015; issn1 162–2 881 ◾ June 29, 2015
3 EDITORIAL
4 OVERVIEW
4 Country Risks are unlikely to derail economic recovery
4 The Atlases of growth continue to lift
5 Disruption can be a good thing… sometimes
6 Allocation is not just a numbers game as se-lection is critical
6 Reflation of the economy is a slow and softexperience
7 Political risk: “Déjà vu” or “Déjà new”?
8 Sector Risks: Keep your helmet on
8 Surprises could throw some sectors off bal-ance
10 Heterogeneity: Going global is like shiftinggear on a mountain bike
10 Machinery and Equipment: A bumpy road forinvestments
11 Retail is on fire
12 Overcapacity: Still an uphill battle
14 Country Risk Outlook
16 Business Insolvency Outlook
18 Sector Risk Outlook
20 OUR PUBLICATIONS
22 SUBSIDIARIES
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Euler Hermes Economic Outlook no. 1217-1218 | May-June 2015 | Macroeconomic, Country Risk and Global Sector Outlook
EDITORIAL
Quicksand
LUDOVIC SUBRAN
Doing business is like riding a bicycle: to keep your balanceyou must keep moving; and it has been quite a mud runlately! Companies have for a long time realized that theyhave to fight relentlessly to avoid getting bogged down bypolitical turbulence, liquidity freeze and bewildering confi-dence headwinds. Yet, macroeconomic conditions are shift-ing like plate tectonics. This year, the risk of a Fed-quake (theimpact of the hike in interest rates by the U.S. Federal Re-serve), the eruptions of the Chinese financial volcano andthe Greek fault zone have reminded everyone of the com-plexity of conducting business globally. Lines are blurred ininternational (gunboat) diplomacy: Cuba and Iran could bein, while Venezuela and Yemen are definitely out. Well-es-tablished industries are getting nudged, disrupted and Uber-ized as they continue to hoard cash. The commoditizationof (virtually every) things weakens the very effort to continueto create value. Climate change may not be guilty of thatbut there is certainly a changing economic climate! So thequestion is: How to escape quicksand (literally and figura-tively)? It is not that simple: you have to relax, drop everythingand move horizontally. What does it mean? Well first, theworld of hyper information is not doing you any good: every-thing looks like a potential trap when actually most politicaldeadlocks and market volatilities end up getting solvedswiftly. Keep calm and carry on, it does get better (most ofthe time). Second, carrying a lot of baggage is not an option:
legacy is important in conducting business but being nimblemeans letting go of what was once very (too) valuable in-cluding a core market, a successful product or an effectivepartnership. Last, moving horizontally may be the best wayto get out of deep quicksand. In business terms, it meanslooking around and investing out of the box to avoid sinking.Easy, huh? Well the heavy heat and moisture of the junglemay not help you keep a cool head, even for the IndianaJones out there. There are some Lost Arks to raid (many fron-tier markets out there that are doing the right things to attractinvestors), Temples of Doom to dodge (I am trying hard notto think of the Eurozone right now) and Crystal Skulls to find.You do not want it to be your Last Crusade, right?
+Despite a difficult and volatile firsthalf of 2015, growth remains broadlyon track +However the recovery is very topsy-turvy with previous underperformers,Europe and Japan, surprising to theupside and offsetting the slightlyweaker performances of the US andChina+Advanced Economies will see theirbest year since 2010 at +2.0% andEmerging Markets are likely to seetheir weakest since 2009 at +3.8%
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Economic Outlook no. 1217-1218 | May-June 2015 | Macroeconomic, Country Risk and Global Sector Outlook Euler Hermes
The Atlases of growth continue to lift Compared to prior years, despite a tough press,2015’s global growth has not disappointed tothe same degree as most post-2008 years. Welook for GDP to register at +2.7%, the same levelas 2014 before rising by +3.1% in 2016. Whilethere has been much concern surrounding theperformance of the two largest countries in theworld, we see both of these economies remain-ing on track and largely in line with our expec-tations at the beginning of the year. The UnitedStates has repeated its post-crisis penchant fora disappointing Q1 that is attributable to theweather that triggers pent up demand support-ing a Q2-Q4 pick up. Interestingly there has beenless evidence of consumers’ spending theirgasoline price drop dividend than we wouldhave expected. We still look for a firm +2.5%performance and given the continued improve-ment in the labor market expect that the Fed
OVERVIEW
Country Risks are unlikely toderail economic recovery MACROECONOMIC RESEARCH TEAM
+Disruption from the first Fed rate hikein over nine years and the shift inChina's growth policy from quantity toquality remain crucial to theperformance of H2-2015+Allocation of resources remainsfocused on the financial marketsrather than the real economy and thisis only changing gradually+Reflation will allow economies tolower their debt to GDP ratios asnominal growth will start to fire withtwo thrusters
Malaysia
Vietnam
Thailand
South Korea Singapore
Saudi Arabia
Chile
Australia
Venezuela
New Zealand
Peru
South Africa
World
Japan
Indonesia
United States
Canada
Brazil
Colombia
Philippines
Germany
Russia
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20%
Prim
ary c
omm
odity
expo
rts to
Chi
na (%
tota
l exp
orts
to C
hina
)
Exports to China (% GDP)
Malaysia
Vietnam
Thailand
N Neww Z Zeaeallalandnd
World
United States Philippines 20% %
30%
4040% % % % % %
Prim
ary c
omm
odity
expo
rts to
Chi
naa ( (%
% totot
tatatal l l e
xexepopo
rtrts s t
oto C C C
hihihinanana
))))
C Chihilee 4040000% % % % %
50% % % %
101 0%%
Sauaudid ArA abiai
AuAuA sttraralia
Venezuela Venezuela V
Peru
S Sououth Affriricaca Inddonno esse iai
Canadada
Brraazzilil
CCoCololombmbiia
Russia
606 % % %
7077 %
8880%
99090%
U
C
a S
Sources: IHS, Euler Hermes
Vulnerability to Chinese growth
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Euler Hermes Economic Outlook no. 1217-1218 | May-June 2015 | Macroeconomic, Country Risk and Global Sector Outlook
will raise rates in Q4 of this year. China’s shiftfrom quantity to quality growth will still see avery robust +7.0% this year, revised down onlymarginally. While the drop in trade activity hasbeen concentrated on imports, down 17.6% y/yin May, the impact has been markedly on othereconomies. The policy reaction has been en-couraging with the PBoC cutting interest ratesfrom 5.60% to 4.85% and lowering the reserveratio requirement by 1.00% to 18.5% to help sup-port loan growth. While the Central Govern-ment remains focused on boosting infrastruc-ture investment with the allocation of USD186bn to upgrade internet infrastructure andthe creation of a USD 20 billion fund for afford-able housing and the authorization of six newrail lines costing USD 40 billion.
Disruption can be a good thing…sometimesThe start of 2015 saw the introduction of Quan-titative Easing (QE) by the European CentralBank, which combined with the drop in oil pricessaw a notable boost to the Eurozone consumer,which was not evident in the US. At the sametime European corporate margins have also
benefitted. We look for the Eurozone recoveryto remain on track in H2, despite concerns aboutGreece leaving the Eurozone hindering opti-mistic we do not believe the political will to keepthe Eurozone united has expired. The drop inthe euro over the past year has also seen a sig-nificant benefit to exporters and this has beencompounded by a strong performance fromthose countries who made the greatest struc-tural adjustments – Ireland (+3.8% growth ex-pected in 2015 after +4.5% in 2014) and Spain(+2.8% in 2015 after +1.4% in 2014) – who arefinally seeing the fruit of their labor.The most highly anticipated event in H2 is thetiming of the first US rate hike in over nine years;which we anticipate will come in Q4. After a pe-riod of exceptionally low rates we look for a Fedquake to truly jolt markets, economies and cor-porates, particularly those unprepared or unableto cope with the change. While wage and infla-tionary pressures remain anemic causing littleurgency for a pre-emptive hike, comparativelyhawkish Fed speak and the momentum of thelabor market recovery means there is the po-tential for a Q3 hike. So while the uncertaintyfrom our perspective remains over what might
-0.5pp growth inemergingmarkets in 2015
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Economic Outlook no. 1217-1218 | May-June 2015 | Macroeconomic, Country Risk and Global Sector Outlook Euler Hermes
seem to be trivial question – namely there beone or two rate hikes from the Federal Reservein 2015, this is likely to see continued disruptionin Emerging Market currencies with particularconcerns surrounding South Africa, Turkey,Venezuela and Russia. The risk of further slowdown from China alsohas two levels of consequences. Firstly for thosecountries that rely on China as a key export des-tination such as Singapore, South Korea,Malaysia, Chile, Saudi Arabia and Thailand – forwhom exports to China are worth more than5% of GDP. The next layer is those commodityexporters, such as Colombia, Brazil, Australia,Venezuela, Peru and Saudi Arabia, where pri-
mary commodity exports to China are morethan 70% of total exports to China. It is theseeconomies, who particularly attention must bepaid to as any misery will be supersized.
Allocation is not just a numbers gameas selection is criticalThere has been a significant expansion of themajor central banks, and super accommodativemonetary policy has seen rates move negativein Switzerland, the Eurozone, Denmark andSweden, all failing to spark aggressive price in-flation as feared by monetarists. By contrast,price inflation has been evident in financial as-sets with a rise in financial investment rather
than business investment. This is understand-able given the lack of business activity and ulti-mately confidence in many markets. While busi-ness activity has improved in many developedmarkets of late, it remains understandably par-ticularly anemic in Brazil and Russia – under-standable given both countries are in recessionwith their worst performance this century. It isalso worth noting that China’s PMI shows thatmanufacturing continues to tread water, a starkcontrast to the improvements on show in theEurozone, Japan, US and India. While the lackof activity has seen broad money supply (M3)growth in the Eurozone and US remain at levelsmore than half that seen in 2008, where as aneight fold increase in the Bank of Japan’s balancesheet has only seen M3 growth rise to just over+2%. This lower activity and decreased optimismhas also reduced capital market flows to Emerg-ing Markets at a time when loan demand hasdropped and standards have become tighter,although the causality of this relationship is notclear. What is crystal clear is that Emerging Mar-ket growth at +3.8% will be the lowest since2009. While Advanced Economies will have theirbest year since 2010 at +2.0%, driven largely bythe turnaround in Europe and Japan.
Reflation of the economy is a slowand soft experienceDespite significant monetary accommodationinflation expectations in the major economieshave been gradually trending down over thepast two years. They only started to edge higherat the start of 2015 as evidence of a self-sus-taining recovery became more evident. Whatis important about this is that it means nominal
-20
-10
0
10
20
30
40 United StatesLatin America
JapanEurozone Eastern Europe
Asia-Pacific Excl. Japan
06-1501-1506-1401-14
Investor Confidence Sentix Behavior Index, monthly indices
Sources: IHS, Euler Hermes
Real GDP growth, annual change, %
Weights* 2013 2014 2015f 2016f
WORLD GDP GROWTH 100 2.6 2.7 2.7 3.1
Advanced economies 62 1.4 1.7 2.0 2.2
Emerging economies 38 4.7 4.3 3.8 4.5
North America 25 2.2 2.4 2.5 2.6
United States 22 2.2 2.4 2.5 2.7
Canada 2 2.0 2.4 1.5 1.7
Latin America 8 2.9 1.2 0.6 1.9
Brazil 3 2.7 0.1 -1.0 1.0
Mexico 2 1.4 2.1 2.9 3.5
Western Europe 23 0.1 1.3 1.5 1.7
United Kingdom 4 1.7 2.8 2.2 2.0
Sweden 1 2.7 0.0 1.3 2.4
Eurozone members 17 -0.4 0.8 1.4 1.7
Germany 5 0.2 1.6 1.7 1.6
France 4 0.7 0.2 1.2 1.5
Italy 3 -1.9 -0.4 0.6 1.1
Spain 2 -1.2 1.4 2.8 2.5
The Netherlands 1 -0.7 0.9 1.9 2.0
Belgium 0 0.3 1.1 1.3 1.5
Greece 0 -4.0 0.7 -1.5 1.5
Portugal 0 -1.4 0.9 1.5 1.8
Central and Eastern Europe 6 1.9 1.4 -0.7 0.9
Russia 3 1.3 0.6 - 4.0 -2.0
Turkey 1 4.1 2.9 3.0 4.0
Poland 1 1.7 3.4 3.3 3.4
Asia 29 5.1 4.7 4.9 5.1
China 11 7.7 7.4 7.0 6.8
Japan 8 1.6 -0.1 1.2 1.7
India 3 6.9 7.3 7.7 7.8
Oceania 2 2.1 2.7 2.6 2.9
Australia 2 2.1 2.7 2.6 2.9
Middle East 4 2.7 3.0 2.9 3.9
Saudi Arabia 1 2.7 3.6 2.5 3.5
United Arab Emirates 1 5.2 4.2 3.5 4.5
Africa 3 4.1 3.7 3.8 5.0
South Africa 1 2.2 1.5 2.0 3.0
Morocco 0 4.4 2.5 4.5 4.5
* Weights in global GDP at market prices, 2014
Sources: National sources, IMF, IHS, Euler Hermes forecasts
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GDP will increase more rapidly and thus reducethe debt to GDP burden that has ballooned glob-ally since the crisis began. However this changealso needs to be accompanied by a change infiscal dynamics, whereby countries eitherthrough self-imposed austerity or throughhigher revenues from an improving economyaddress recently run deficits. While Russia, Chinaand India are seeing fiscal expansion at a quickerpace than through the crisis this is less concern-ing since these three countries have a low debtto GDP ratio. While the fourth BRIC, Brazil, hasentered a consolidation path, after a relativelyexpansionary position during the crisis, whichis also weighing on the economy’s prospects.Whilst most other major countries, the US,France, Germany, Japan and the UK, are seeingcontinued consolidation, albeit at a slower pacethan was experienced during the crisis, meaningthat the fiscal burden of austerity will be notablyless in 2015-16.
Political risk: “Déjà vu” or “Déjànew”? The political landscape remains one of persistchange, unfortunately little of it is offering sta-bility or likely to decrease uncertainty in themedium or near term. There are two crises, Rus-sia and Greece, which give us a feeling of un-comfortable familiarity. Finally the potential forthe UK’s exit from the EU is now a very real,albeit remote, possibility. Sources: IHS, Euler Hermes
Euler Hermes Economic Outlook no. 1217-1218 | May-June 2015 | Macroeconomic, Country Risk and Global Sector Outlook
Russia
France
China India
Germany
South Africa
Brazil
Mexico Japan
Italy
Turkey
US
United Kingdom
Portugal Spain
Ireland
-5%
-3%
-1%
1%
3%
5%
7%
9%
-3% -2% -1% 0% 1% 2%
Varia
tion
in C
AB be
ttwee
n 2
009
and
2014
Forecast variation in CAB between 2014 and 2015
i
Fiscal expansion has startedafter adjustment
Still adjustingbut at a lower pace
Still expansionarybut at a lower pace
Fiscal consolidation has startedafter fiscal expansion
Evolution of cyclically adjusted balances(CAB), % of GDP
The majority victory of the Conservatives in theUnited Kingdom means that there will be a ref-erendum on the UK’s membership of the EU,most likely in H2-2017. While there are manyoptions for the UK’s to operate outside of theEU, we see all of them having a negative impacton trade especially since the UK-EU relationshipunfortunately is uneven. Since the EU accountsfor 50% of UK total imports while the UK accountsfor only 5% of EU total exports. Leaving the EUwould likely impose significant trade barriers forthe private sector in the UK as higher tariffswould make them less competitive and de-creased access to Eurozone markets could behard to navigate until a new trade agreementwas firmly in place which might take many years. Greece has had a difficult six months, with ex-pectations at the start of 2015 for an expansionof +1.4% only really chipping away at growth’scapitulation of 26% between 2007 and 2014.The introduction of capital controls and the in-creasing financial isolation of Greece weredriven by increasingly dire economic situation.Financing exports has become especially diffi-cult with particular concern around those com-panies with large domestic assets and high ex-ternal loans. We see continued supply disruption
risk and fading local demand pushing Greekback into recession in the second half of theyear and contracting -1.5% in 2015. We antici-pate that capital controls will remain in placeinto the medium term as once implementedthey are very difficult to reverse given the nec-essary rebuilding of confidence is a slow process(e.g. Cyprus - 2 years, Iceland – 7 years). Wewould expect them to be removed only gradu-ally and once the situation looks promisingenough that flows would be heading intoGreece not away from it.Finally the economic outlook in Russia remainsfraught and far from encouraging, however weno longer expect a Balance of Payment crisisrather the position has become one of increas-ing economic isolation. Sanctions from the EUand US have hit strategically important sectors,but this has seen internal import substitutionto meet domestic demand and fiscal stimulusto support the economy. We remain uncon-vinced that this will provide a long term solutionbut in the short and medium term this is main-tainable. However external demand and financ-ing flows will be necessary to truly enter a sus-tainable recovery mode without getting apuncture on the way.
>GreeceGrexit or no Grexit?
>The UKBrexit or no Brexit?
>RussiaPolitics, sanctions and policies
Political and institutional crisis
Key elections
Social distress
>SpainGeneral elections in November 2015
>ArgentinaGeneral elections in October 2015
>BrazilHigh inflation and rising unemployment
>ThailandDelayed elections
>TurkeyIndecisive election results
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Surprises could throw some sectorsoff balanceThe economic recovery seems to finally bearfruit for sectors at a global level as Q2 2015 saw24 sector upgrades globally vs. 21 downgrades.This represents an important reversal in the re-cent sector risk trend as the latter was goingdownhill faster and faster since Q2 2014, with anet balance of respectively -4, -9 and -14 overthe last three quarters. The improvement of theConstruction sector in the United States fromMedium to Low risk is a major change in oursector risk assessment this quarter. It suggeststhe 2008 crisis, driven by the subprime bubbleburst, is truly in rear view. However, the good news appears quite isolatedas the positive net balance is in fact mainly dueto a slowdown in sector risk downgrades ratherthan an increase in upgrades – in fact therewere two upgrades less than in Q1. Moreover,it is not enough to counterbalance the sharpdeterioration of 2015’s first quarter, the net bal-ance remaining overall negative for the first se-mester (50 upgrades vs. 61 downgrades). Thus,if a low point has been reached the stars have
+24 industries with a better risk rating, such asthe Construction sector in the U.S.; 21 with aworse risk rating including sectors affected bycapital controls in Greece (Chemicals, ITServices, Computer, Retail, and Machinery andEquipment)+Business insolvencies worldwide confirm theexpected decrease in 2015 (-2%), but Russia(+30%), Brazil (+12%), Turkey (+10%) andChina (+8%) will experience severe credit risk.+Machinery and equipment continues to showinvestment gaps, while Retail is finally pickingup in Europe and North America+Agrifood and Pharmaceuticals to enjoy thesoundest fundamentals, while Metal andConstruction are still at sensitive levels of risk
Sector Risks: Keep yourhelmet on IRENE HERLEA WITH THE SECTOR AND INSOLVENCY RESEARCH TEAM
Economic Outlook no. 1217-1218 | May-June 2015 | Macroeconomic, Country Risk and Global Sector Outlook Euler Hermes
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Euler Hermes Economic Outlook no. 1217-1218 | May-June 2015 | Macroeconomic, Country Risk and Global Sector Outlook
not yet aligned for a steady and structural im-provement in the global sector risk. The current diverging trend between advancedeconomies and emerging markets sets the stagefor sector risk changes. The Energy sector, par-ticularly electricity production, is emblematic ofthis dynamic. While power generation remainedflat in OECD countries between 2008 and 2013,it soared in Brazil, India, China and their emerg-ing peers over that period. In 2015, the tideshould turn: Brazil, Russia, India, China and SouthAfrica will see their electricity production growthslowing down to +4% compared to an averageof +7% between 2010 and 2014. In advancedeconomies it will rebound to +2%, its highestlevel since 2010. This diverging evolution between advancedeconomies and emerging markets will have aclear impact on companies' financial health: in-solvencies are expected to rise sharply com-pared to their 2014 level in Russia (+30%), Brazil(+12%), Turkey (+10%) and China (+8%). Bycontrast, they will decrease in most Europeancountries, with most striking figures expectedin the Netherlands (-20%) and Spain (-18%).
Overall, insolvencies will confirm the expecteddecrease in 2015 (-2%), but this level will be still5% higher than before the crisis. Moreover, sudden and unpredictable disruptionshocks weigh heavily on sector ratings changes.Nowhere has this been better illustrated thanthe current political and economic turmoil inGreece. The introduction of capital control led
+3 net upgrades in
Q2 2015
-50
-40
-30
-20
-10
0
10
20
30
40
50
2013 Q2 2013 Q3 2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 2015 Q2
Worse Risk Grades Better Risk Grades Net Revisions
Revisions of sector risk ratings in Q2 2015in number of sectors, by quarter
Source: Euler Hermes
tive, or even Food to a lesser extent. Indeed, thelatter relies on private demand and is thus verysensitive to local economic situations. The for-mer, are rather moved by structural sector dy-namics occurring at an international scale. Log-ically, Construction which is the most localoriented segment of activity presents the high-est dissemination of risk ratings.
Machinery and Equipment: A bumpyroad for investmentsJune Global Manufacturing PMI suggests no sig-nificant improvement in the investment cyclein the near term. Even if it remains positive, theindex has fallen to its lowest level since July2013. Investment continues to face both upsand downs in advanced economies. In Q1 2015it was strong in some countries: Spain (+6.7%),UK (+4.7%); but remained sluggish in France(-0.6%) and Germany (+1.1%). In emergingmarkets, it is on a clear declining trend. Thisslowdown is mainly due to a decrease in invest-ments in Brazil and Russia, where we expectGDP to contract by respectively -1% and -4%.Long term dynamics do not appear muchbrighter. Lack of confidence and risk aversionare the two main obstacles for liquidity to flowagain towards emerging markets where highestpotential is located.
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Economic Outlook no. 1217-1218 | May-June 2015 | Macroeconomic, Country Risk and Global Sector Outlook Euler Hermes
to five downgrades, accounting for 25% of allour downgrades in Q2. Chemicals, IT Services,and Computer have been downgraded fromMedium to Sensitive risk; Retail, and Machineryand Equipment from Sensitive to High risk. Un-surprisingly, Greece has no more sectors in Lowor Medium risk, with eleven being consideredat Sensitive and seven at High risk reflecting theseverity of the crisis. Finally, insolvencies in thecountry are expected to rise again by +10% in2015 after 7 consecutive years of increase.
Heterogeneity: Going global is likeshifting gear on a mountain bikeSector risk is caught between local economicevolutions and international industry dynamics.This highlights the necessity to consider bothrisk level and dispersion to understand the un-derlying sector fundamental trends when ex-panding in new countries. Overall, only 24% of sectors in the 72 countriesmonitored enjoy sound fundamentals in theshort term. 49% of them show signs of weak-nesses and 26% face structural weaknesses orare experiencing a recognized crisis. At a globallevel, Pharmaceuticals and Agrifood continueto present the best risk profile. The former is atHigh risk in none of the countries monitoredand in Sensitive risk in only six of them (Spainand Portugal being the most important). Thelatter faces High risk only in Egypt, and Sensitiverisk in four other countries (Poland, Russia,Cyprus and Greece), mainly because of the cur-rent Russian embargo. On the contrary, Metaland Construction are the sectors facing thebiggest challenges, with their global risk ratingsstill being sensitive. The fourteen other sectors
monitored are globally in Medium risk. Thishighlights that a vast majority of the economyis just treading water.The apparent homogeneity of global sector rat-ings should be considered with caution. Risk rat-ings for capital intensive industries such as Pa-per, Metal, Machinery and Aerospace are usuallyrelatively homogeneous across countries. Thisis not the case for consumer oriented activitiessuch as Retail, Household Equipment, Automo-
North America Index
Euro zone Index
Western Europe Index
GLOBAL INSOLVENCY INDEX
Asia-Pacific Index
Central & Eastern Europe Index
Latin America Index
Africa & Middle East Index 8%
39%
10%
3%
-2%
-8%
-9%
-4%
2015 f vs. 2014 Insolvencies by Region
Sources: National figures, Euler Hermes
Agrifood
Aeronautics Chemicals
Paper
Metal
Construction Textile
Computer & Telecom
Pharmaceuticals
Electronics
Machinery& Equipment
Household Equipment Retail
Automotive
IT Services
Transport
Energy
40 50 60 70 80 90 100
Low
Med
ium
Sens
itive
High
Sector Risk Dispersion Index
Sect
or R
isk G
rade
Sector Risk Average Grade and Dispertion in Q2 2015
Note: The size of the dots is proportional to the sector value (in bn USD) Sources: Oxford Economics, Euler Hermes
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Euler Hermes Economic Outlook no. 1217-1218 | May-June 2015 | Macroeconomic, Country Risk and Global Sector Outlook
The Machinery and Equipment sector is themain barometer for firms' investment cycle. Itsrisk rating fell in Q1 2015 (9 downgrades) be-cause of the oil prices collapse. We expect thelater will lead to a 15% cut in exploration andproduction investments for the whole 2015 year.The situation has stabilized this quarter, withthe only change in rating being recorded inGreece. Overall the net risk changes have beennegative or nil for one year. This lack of upgradesin the sector is representative of the still modest(at best) improvement in the private investmentcycle.Public support for investment could be thegame changer in both advanced economies andemerging markets. For the former, public sup-port is increasing thanks to the slowing pace inbudget consolidation. Most of this support willbe indirect. Tax rebates have been introducedin European countries to support corporates in-vestment: French CICE and responsibility pact;cuts in corporate tax rates in the UK, Italy andSpain. In emerging markets, public supporttranslates into more direct State intervention.In China, the central government is taking thelead on investment allocation, with a reorienta-tion from depressed industries (e.g. steel) tomore dynamic ones such as electronics. This new public momentum should further
strengthen the current recovery in the Construc-tion sector, as public spending on infrastructureswill go along with private household invest-ments. The sector enjoys 8 upgrades this quar-ter, the most important ones being in the UnitedStates and in Poland. However these two casesillustrate two very different situations. TheUnited States are experiencing a real recoverywith the National Market Index back to its 2006level. For Poland, the worst appears definitelyover with the confidence indicator being on therise since April 2013, but the sector continuesto face structural weaknesses. Its risk level isnow considered as Sensitive. Overall, the Con-struction sector risk remains High or Sensitivein half of the countries monitored. Moreoverthe trends of house prices diverge highlyamongst countries. Recent housing bubbles arepart of the past (US, Spain) and others are slowlydeflating (France). But in other countries (China)these bubbles are bursting, or even threateningto burst (Australia).
Retail is on fireAlong with Construction, the Retail sector en-joyed the highest number of upgrades this quar-ter. Spain and the UK see their Retail sector rat-ings improving from Sensitive to Medium risk.After an interruption in the last two quarters of
+4%growth in theConstruction
sector in 2015
70
80
90
100
110
120
130
140
Operating profitRevenue Consumer price index (World)
15f1413121110090807
Average Revenue and Profit for the Top 30publicly traded Retailer vs. Consumer priceindex Index: 2007=100
Sources: Bloomberg, IMF, Euler Hermes
private consumption is expected to hold firmin 2015 (+3%), but a possible rise in interestrates in Q1-2016 would affect the current Retailsector impetus. However, persistent downward price pressurecontinues to weight on firms' profitability. De-spite significant monetary accommodation, in-flation expectations have only started to edgehigher since the start of 2015 as evidence of aself-sustaining recovery became more evident.Inflation in the Eurozone remains far below thesymbolic 2% line. This is not yet enough to trans-late into companies' income statements. TheNorthern European Retail sector (e.g. Nether-lands in high risk), is particularly affected. Thisis because the latter is mainly composed of smallindependent actors which do not have enoughcash buffer to face current challenges. The sit-uation appears sounder in France, Italy or evenSpain thanks to the importance of large inter-national companies operating in those markets.Overall, after bottoming out in 2014 (-13%) be-cause of massive restructuring led in NorthAmerica and the UK, we expect operating resultof the top 20 listed Retail companies to rise by+4% in 2015.
Overcapacity: Still an uphill battle Metal and Paper are the two main sectors af-fected by overcapacities. Both suffer from slug-gish demand which does not enable firms tocover their high fixed costs and regain profitabil-ity. However their respective lack of dynamismdoes not have the same starting point. In thecase of Metal this is linked to a slowdown in
12
Economic Outlook no. 1217-1218 | May-June 2015 | Macroeconomic, Country Risk and Global Sector Outlook Euler Hermes
2014, the sector has now returned to a slow butimproving trend. This favorable dynamic is ledby two main drivers: i) savings on oil are boost-ing private consumption; and ii) economic re-covery in Western Europe. The June EurozoneRetail PMI is reflects the current European mo-mentum with sales increasing for two consec-utive months for the first time over four years.Germany has been the main driver of this dy-namic, with private consumption benefitingfrom rising real wages. Retail sales are also onthe rise in France but we await more evidencein the coming quarters to differentiate betweena sustainable or fleeting rebound. In the UK,
+2%in Consumerspending in the EUin 2015
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Metal Paper Chemicals Aeronautics
Highrisk
Sensitiverisk Medium
riskLowrisk
Distribution of Global Risk Level in Selected Sectors in number of countries in Q2 2015, in %
Source: Euler Hermes
13
Euler Hermes Economic Outlook no. 1217-1218 | May-June 2015 | Macroeconomic, Country Risk and Global Sector Outlook
ance in the sector rate changes since Q3 2013.However there is no sign of a real recovery yet.Crude steel capacity utilization ratio for the mainproducers has bottomed at 72% in May, -3.4points lower than it was one year ago. Pricessharply decreasing for 4 years further weigh onfirms low profitability. The only upgraderecorded this quarter occurs in Norway wherethe sector relies on the aluminum industryrather than on the steel one. The sector presentssound fundamentals in only two countries,namely Oman and Qatar, while it faces structuralweaknesses in more than half of the countriesmonitored (40 countries). The situation is themost critical in Europe where 28 out of 32 coun-tries are in Sensitive risk. By contrast, NorthAmerica appears to be in better shape with amedium level of risk. The Paper sector appears particularly depressedin Europe. Sluggish demand has led paper com-panies to shut down around a third of total Eu-ropean papermaking capacity since 2010. Itrecords one more downgrade this quarter, withthe UK falling from Sensitive to High risk. Thisillustrates how a sector's structural weaknessescan offset favorable macroeconomics drivers,as evidenced by the UK’s broad sector risk show-ing an improving trend since Q2 2013. Overall,no upgrades have been recorded in the papersector for more than two years and it only enjoyssound fundamentals in India, thanks to a stilllow level of digitalization in the country. Despite the challenges analyzed above, sectorswith long term sound fundamentals continuedto outperform this quarter. Chemicals and Aero-
nautics are the two main examples for activitiesenjoying high profitability despite huge capitalintensity requirements. High R&D spending anda handful of actors are the common denomi-nators to these activities. Moreover the chemicalsector benefits from quite diversified outlets:Construction, Automotive, and Electronics. Thiscan take over one another and thus smooth de-mand drops. After one more upgrade this quar-ter in Italy, the sector enjoys a low level of risk inalmost half of the 72 countries monitored. SouthAmerica and North Africa are the two regionsto steer against this dynamic with Egypt andTunisia in high risk and Brazil in sensitive risk. Aeronautic builds upon the power of its twomain players which currently enjoy order booksexceeding 9 years of production. Facing thishigh level of demand may be a challenge in thelong run for smaller suppliers. Overall, the sectoris at a low level of risk in almost 1/3 of the coun-tries rating this industry and at medium in allthe others. The situation currently appears mostfavorable for European companies which benefitfrom the more competitive euro/dollar ex-change rate. By contrast, parity weighs on NorthAmerican players, the sector being rated atmedium risk in both Canada and the United-States.
steels main consumers both by sector and coun-try. The current rebound in the automotive andconstruction sectors, which combined accountfor about half of total global steel consumption,has the potential in the long run to drive to aslight improvement. For Paper, the strugglescome from printing presses and books losingground to digital devices; this calls into questionthe very existence of the printing activity as any-thing other than a novelty in the future. From arisk perspective, weak demand and structuralovercapacity has led to generalized weaknessesin both Metal and Paper sectors. Admittedly the Metal sector's rating collapsehas come to an end with a first net positive bal-
1 outof 4sectors still atsensitive or highrisk
14
Economic Outlook no. 1217-1218 | May-June 2015 | Macroeconomic, Country Risk and Global Sector Outlook Euler Hermes
Country RiskOutlook
2015Q2 2015 — UPDATE
Serbia
Economic fundamentals remain weak. The fiscal position is increasinglyprecarious, with ongoing large fiscal deficits and rising public debt. Creditgrowth has shifted from excessive growth in 2012 to contraction in 2013-2014. Poor monetary policy has failed to prevent high exchange rate andinflation volatility over the past decade. Currency risk remains on the cards.The current account deficit will remain elevated at around -5% of GDP in2015-2016. The external debt burden is high. The economy is also vulnerableto natural disasters. Severe floods in 2014 triggered a recession (GDP downby -1.8%) that will continue into 2015 (GDP forecast to decline by -0.5%).Consequently, we have changed the Short-Term Rating to High (4) fromSensitive (3). The Medium-Term Rating continues to be D.
Czech Republic
After recovering in 2014 (+2%), the economy is expected to strengthen in2015 (+3%), driven by domestic demand which has benefited from looserfiscal policy. Nonetheless, the fiscal deficit was contained to -2% of GDP in2014 and should come in at a similar ratio in 2015-2016. Public debt fell to43% of GDP in 2014, a very favourable ratio by current EU standards. Thecentral bank continues to support economic activity by keeping its policyinterest rate near zero. The exchange rate should remain stable in the longerterm. The current account shifted into a small surplus in 2014 and theexternal debt burden is manage able. FX reserves are adequate, coveringaround 5 months of imports. On the back of robust macro-economicfundamentals and the sustainable recovery we have changed the Short-Term Rating to Low (1) from Medium (2). The Medium-Term Ratingcontinues to be BB.
Greece
Political uncertainty, worsening economic conditions and theintroduction of capital controls will act as a perfect storm on theGreek economy. Difficult financing conditions in particular willincrease the risk of non-payment by Greek companies. Overall, GDPis likely to fall by -1.5% in 2015 as domestic demand contracts;business insolvencies are expected to rise by +10%. Consequently,we have changed the Short-Term Rating to High (4) fromSensitive (3) and the Medium-Term Rating to C from B.
Medium termrisk:the scale comprises 6 levels :AA represents the lowest risk, D the highest.
Short termrisk :the scale comprises 4 levels :1 represents the lowest risk, 4 the highest.
3countries with
deterioratedratings
l1country with
improved rating
kD3 D4BB2 BB1
B3 C4
15
Euler Hermes Economic Outlook no. 1217-1218 | May-June 2015 | Macroeconomic, Country Risk and Global Sector Outlook
MACROECONOMIC RESEARCH AND COUNTRY RISK TEAM
Kazakhstan
Macroeconomic imbalances have increased again since 2014, due to adverseeffects from sharply falling global oil prices as well as the crisis in Russia. GDPgrowth is forecast to slow to just +1.8% in 2015; and both the fiscal andcurrent account balance will shift to considerable deficits as oil revenues andexports will drop. The KZT has strongly appreciated against the RUB since2014, leading to a sharp loss of competitiveness of Kazakh businesses. As aresult, downward pressure on the KZT/USD exchange rate has built up andthe KZT is susceptible to a marked depreciation in the next year or so. FXreserves have fallen, now covering just 2.7 months of imports. The bankingsector crisis that emerged in 2009 is still unresolved. Consequently, we havechanged the Short-Term Rating to High (4) from Sensitive (3) and theMedium-Term Rating to D from C.
Source: Euler Hermes, as of June 29, 2015
R U S S I AR U S S I A
4 changes in country risk ratings2nd Quarter 2015
C3 D4
North America
Latin America
Western Europe
Insolvencies down:more than -5 %
Insolvencies down: between -5% and 0%
Insolvencies on the rise:between 0 % and +5 %
Strong rise in insolvencies:more than + 5%
*Regional Index basis 100=2000
16
Economic Outlook no. 1217-1218 | May-June 2015 | Macroeconomic, Country Risk and Global Sector Outlook Euler Hermes
GlobalinsolvencyindexChange in 2016f:
-2%
Changein 2015f:
-2%
2014 Change Change Number Change 2015f 2016f 49 6% 39% 9% 1,734 3% 12% 5% 359 1% -8% 15% 167 18% 169% 11%
2014 Change Change Number Change 2015f 2016f 72 -18% -4% -2% 26,983 -19% -5% -2% 3,116 -2% 5% 2%
Regional Index*United StatesCanada
Regional Index*BrazilColombiaChile
2014 Change Change Number Change 2015f 2016f 175 -17% -8% -4% 24,085 -7% -3% -2% 62,614 0% -1% -3% 23,098 -9% -3% 6% 15,654 11% -2% -5% 6,205 -30% -18% -9% 7,621 -19% -20% -5% 4,240 -7% 4% 1% 7,154 -7% -5% -7% 4,803 5% 0% -3% 10,736 -9% -3% -5% 5,423 -1% 3% 3% 4,049 -19% 1% -5% 3,462 -6% -8% -6% 1,590 3% 10% 0% 4,019 -33% 8% -8% 1,164 -15% -9% -8% 876 -19% -2% -6%
Regional Index*GermanyFranceUnited KingdomItalySpainThe NetherlandsSwitzerlandSwedenNorwayBelgiumAustriaDenmarkFinlandGreecePortugalIrelandLuxembourg
Business InsolvencyOutlook
2015Q2 2015 — UPDATE
Africa & Middle East
Asia Pacific
Central & Eastern Europe
17
Euler Hermes Economic Outlook no. 1217-1218 | May-June 2015 | Macroeconomic, Country Risk and Global Sector Outlook
Change in2014:
-15%
2014 Change Change Number Change 2015f 2016f 113 6% 8% 6% 2,064 -13% 1% 0% 5,044 15% 12% 10%
Regional Index*South AfricaMorocco
2014 Change Change Number Change 2015f 2016f 56 -13% 3% 2% 2,613 2% 8% 8% 9,731 -10% -6% -4% 6,625 -18% 5% 0% 841 -16% 0% 0% 132 -37% -9% 4% 160 27% 13% 2%
271 -1% 11% 7% 285 -24% -16% 0%
Regional Index*ChinaJapanAustraliaSouth KoreaTaiwanSingaporeHong KongNew Zealand
2014 Change Change Number Change 2015f 2016f 241 -6% 10% -1% 9,113 1% 30% 4% 15,822 -9% 10% -1% 822 -11% -1% -1% 2,403 8% -4% -4% 20,696 -30% -37% -4% 17,250 29% -4% -15% 1,402 6% 3% 0% 656 -22% 5% 4% 1,684 8% 7% -4% 960 19% 7% -5% 428 -7% 0% -5%
Regional Index*RussiaTurkeyPolandCzech RepublicRomaniaHungarySlovakiaBulgariaLithuaniaLatviaEstonia
18
Economic Outlook no. 1217-1218 | May-June 2015 | Macroeconomic, Country Risk and Global Sector Outlook Euler Hermes
& telecom
BrazillTransportationlRetail
PerulTextile
& telecom
equipment
CanadakTransportation
United StateskConstruction
Costa RicakConstructionkPharmaceuticalslAgrifoodlElectronics
kConstructionDominican Republic
MexicokAeronauticslConstruction
PanamakConstructionlAgrifood
kConstructionTrinidad y Tobago
equipment
S
& telecom
C
equipment
G
EquipmentlC & telecoml
Sector RiskOutlook
2015Q2 2015 — UPDATE
Source: Euler Hermes, as of June 29, 2015
45 changes of sector risk ratingsat the end of Q2 2015
é @ B j 6 À ‰ î © hAutomobile Car component Construction Transportation Chemicals Pharmaceuticals Agrifood Textile Paper Electronics
(semiconductors)
North America l l l l l l l l l l lLatin America l l l l l l l l l lWestern Europe l l l l l l l l l lCentral and Eastern Europe l l l l l l l l l lAfrica and Middle East l l l l l l l l l l lAsia-Pacific l l l l l l l l l l l
SECTOR RISK RATINGS END OF Q2 2015COUNTRIES WEIGHTED BY THEIR SHARE IN REGIONAL GDP IN 2014
21sectors withdeterioratedratings
24sectors with
improvedratings
k
l
Sound fundamentals; veryfavorable or fairly good outlook.
Signs of weaknesses; possible slowdown.
l
l
l
l
Structural weaknesses; unfavorable or fairly bad outlook.
Imminent or recongnised crisis.
SECTOR AND INSOLVENCY RESEARCH TEAM
19
Euler Hermes Economic Outlook no. 1217-1218 | May-June 2015 | Macroeconomic, Country Risk and Global Sector Outlook
kl
IndonesialAutomobilelCar component
CroatialComputer & telecom
Source: Euler Hermes
ItalykChemicals
TunisiakRetail
MoroccolComputer & telecom
ThailandlHousehold equipment
FrancekAgrifood
IrelandkCar component
NorwaykMetal
United KingdomkRetaillPaper
SpainkTextilekRetail
kAutomobilekCar componentkConstruction
Slovenia
PolandkConstruction
LatviakConstruction
RussialIT Services
TurkeylTextile
AlgeriakCar componentkHousehold equipment
Saudi ArabialComputer & telecom
Czech RepublickHousehold equipment
GreecelChemicalslRetaillMachinery & EquipmentlComputer & telecomlIT Services
+ Á F Ò & ∫ ¬ Metal Retail Machinery &
Equipment Aeronautics IT Services Household
equipment Computer &
telecom Energy
l l l l l l l ll l l l l l l ll l l l l l l ll l l l l l l ll l l l l l l ll l l l l l l l
20
Economic Outlook no. 1217-1218 | May-June 2015 | Macroeconomic, Country Risk and Global Sector Outlook Euler Hermes
Economic ResearchEuler Hermes Group
Economic Outlookand otherpublications
Already issued:
no. 1199 ◽ Macroeconomic and Country Risk Outlook Half-baked recovery
no. 1200-1201 ◽ Business Insolvency Worldwide Patching things up: Fewer insolvencies, except in Europe
no. 1202-1203 ◽ Macroeconomic and Country Risk Outlook Top Ten Game Changers in 2014: Getting back in the game
no. 1204 ◽ Global Sector Outlook All things come to those who wait: Green shoots for one out of four sectors
no. 1205-1206 ◽ Macroeconomic and Country Risk Outlook Hot, bright and soft spots: Who could make or break global growth?
no. 1207 ◽ Business Insolvency Worldwide Insolvency World Cup 2014: Who will score fewer insolvencies?
no. 1208-1209 ◽ Macroeconomic, Country Risk and Global Sector Outlook Growth: A giant with feet of clay
no. 1210 ◽ Special Report The global automotive market: Back on four wheels
no. 1211-1212 ◽ Business Insolvency Worldwide A rotten apple can spoil the barrel Payment terms, past dues, non-payments and insolvencies: What to expect in 2015?
no. 1213 ◽ Special Report International debt collection:The Good, the Bad and the Ugly
no. 1214 ◽ Macroeconomic and Country Risk Outlook Overview 2015: Not such a Grimm tale but no fabled happy ending
no. 1215 ◽ Special Report Global trade: What’s cooking? Introducing twelve countries’ recipes for boosting exports no. 1216 ◽ Macroeconomic, Country Risk and Global Sector Outlook Focus on the signal and ignore the noise
no. 1217-1218 ◽ Macroeconomic, Country Risk and Global Sector Outlook Riding into risks or recovery?
To come: no. 1219 ◽ Special Report
Economic Outlookno.1213 December 2014
Special Reportwww.eulerhermes.com
Internationaldebt collectionThe Good, the Bad and the Ugly
Economic Research
Macroeconomic, Country Riskand Global Sector Outlook
Economic Outlookno. 1216March-April 2015
www.eulerhermes.com
Focus on the signaland ignore the noise
Economic Research
Macroeconomicand Country Risk Outlook
EconomicOutlook no. 1214January 2015
www.eulerhermes.com
Overview 2015Not such a Grimm talebut no fabled happy ending
Economic Research
Economic Outlookno.1215 February-March 2015
Special Reportwww.eulerhermes.com
Global Trade:What’s cooking?Introducing twelve countries’ recipesfor boosting exports
Economic Research
https://www.youtube.com/watch?v=ap_zFMh4g3g&list=PLv38bjQFtjSckSemHBq4MrHHsF8zXIzW9&index=1
21
Euler Hermes Economic Outlook no. 1217-1218 | May-June 2015 | Macroeconomic, Country Risk and Global Sector Outlook
◽The ASEAN Economic Community: A big bang for regional supply chains?> 2015-06-26◽Payment behavior: Who's paying the piper? > 2015-06-25◽Winter freeze and low energy prices: A Canadian Curse 2015-06-08◽Payment Behavior Index (PBI) points to slower Q1 GDP growth 2015-04 -03◽ Switzerland: Survey highlights growing export risks > 2015-04-21◽Expo Milano 2015: Made in Italy alla grande? > 2015-04-21◽Germany’s 3D export strategy to bring an additionnal EUR36bn in 2015> 2015-03-18◽Mexican exports: Time to bring in the Mariachis? > 2015-03-16◽Latin America: Fall in oil prices will cut growth by -0.4pp > 2015-02-26◽Greece and Europe: The sequel Political will, Time and Value-at-Risk, > 2015-01-28◽FAQ: #QEmania - What does it mean for European companies? > 2015-01-22◽An aditional USD88bn of U.S. exports in 2015 > 2014-12-02◽Chinese growth - What could possibly go wrong? > 2014-12-02◽U.S. businesses’payment behaviors point to slowed GDP and mixed picturefor key industries > 2014-11-18◽Spain: Cautiously taking the bull by the horns > 2014-10-08◽Chinese exports 2014-2015: Another US300bn > 2014-10-07
◽Argentina > 2015-06-29◽Austria > 2015-06-29◽Chile > 2015-06-29◽China > 2015-06-29◽Colombia > 2015-06-29◽Congo, Dem. Republic > 2015-06-29◽Côte d’Ivoire > 2015-06-29◽Cuba > 2015-06-29◽Czech Republic > 2015-06-29◽Hungary > 2015-06-29◽Indonesia > 2015-06-29◽Ireland > 2015-06-29◽Kazakhstan > 2015-06-29◽Mexico > 2015-06-29
◽Morocco > 2015-06-29◽The Netherlands > 2015-06-29◽Nigeria > 2015-06-29◽Peru > 2015-06-29◽Serbia > 2015-06-29◽Singapore > 2015-06-29◽South Korea > 2015-06-29◽United Arab Emirates > 2015-06-29◽United Kingdom > 2015-06-29◽United States > 2015-06-29◽Venezuela > 2015-06-29
CountryReport
WeeklyExport RiskOutlook
◽Chemicals in Germany: A window of opportunity that must not be missed > 2015-06-15◽ German Road Transportation : Lower oil prices to give short term relief to sector’s profitability> 2015-05-04◽The paper industry in Italy: Time to turn the page > 2014-12-16◽Consumer electronics: Only a timid rebound in 2015 > 2014-12◽Construction in Italy: Only a timid rebound in 2015 > 2014-12-02◽Textile & Clothing in Germany: A two-geared reality > 2014-10-31◽Textile & Clothing in Italy: Bronze medal on the international podium,but facing obstacles > 2014-10-31◽Italian car sector: Time to do an oil change > 2014-10-22 ◽U.S Automotive > 2014-10-03◽U.S. Construction > 2014-10-03
IndustryReport
http://www.eulerhermes.com/economic-research/economic-publi-cations/Pages/Weekly-Export-Risk-Outlook.aspxN
TheEconomicTalk
N
EconomicInsight
22
Economic Outlook no. 1217-1218 | May-June 2015 | Macroeconomic, Country Risk and Global Sector Outlook Euler Hermes
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Euler Hermes Economic Outlook no. 1217-1218 | May-June 2015 | Macroeconomic, Country Risk and Global Sector Outlook
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This document reflects the opinion of the Economic Research Department of Euler Hermes Group.
The information, analyses and forecasts contained herein are based on the Department's current
hypotheses and viewpoints and are of a prospective nature. In this regard, the Economic Research
Department of Euler Hermes Group has no responsibility for the consequences hereof and no
liability. Moreover, these analyses are subject to modification at any time.
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