The percentage of Moody's industry sector outlooks (ISOs) that are negative increased slightly in early 2015 as positive economic momentum wanes worldwide, the rating agency says in a new report.
Industry outlooks reflect Moody's view of the fundamental business conditions for an industry over the next 12 to 18 months.
"The slight negative shift in the current tally, with five outlooks changing to negative and only two moving to positive in the past quarter, suggests that overall economic growth is slowing," says Managing Director, Mark Gray. "However, our mainly stable industry sector outlooks in the first quarter of 2015 reflect our expectations for positive, but moderate global economic growth."
The main underlying forces sapping corporate momentum are macroeconomic, and include decelerating growth in China and other important emerging markets, as well as continued slow, but uneven growth in the euro area, Gray says in "Positive Momentum Slips Worldwide as Oil-Related Outlooks Continue Retreat." And together these factors are overwhelming positive US-based activity.
Along with macroeconomics and related monetary-policy influences on economic activity, falling oil prices are taking their toll, with energy-related businesses accounting for much of the strain among companies worldwide. Energy-related businesses currently account for five of Moody's nine negative ISOs. The outlooks for the base metals, integrated oil and US coal industries were revised to negative from stable during the first quarter, joining exploration and production, and oilfield services and drilling.
Low energy prices were however directly responsible for Moody's outlook revision for the global airlines industry, to positive from stable. The outlook for solid waste industry also moved to positive in the first quarter, on the back of improving market conditions and higher profits due to cost reductions. The outlooks for consumer products and for-profit-hospitals were both revised to stable from positive during the quarter.


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