15 Sector Reports which prove that Global is the New Local


​If there is one piece of news that captures well the world’s current economic obsession it might be this: for a moment, the price of salmon was higher than a barrel of oil. A Norwegian seafood industry site made the astounding revelation early January. But apart from histrionic fluctuations in commodities’ prices, it is the long-term trends that really shape sectors and industries.


Enter our 15 new global sector reports. [more]

These two pagers - available online as web pages and downloadable PDF files - offer a look at a world where companies strive and struggle to reinvent their businesses. This is no mean task when deflationary pressures, underscored by low commodity prices, shape the business landscape. Crucially, we shed light on where we think the trio of “sectors”, “industries” and “markets” is heading.

Each of the overviews gives a straight-and-to-the-point analysis of one sector – such as the auto industry, construction or retail – both worldwide and in many countries. They include an infographic “id card”: how fragmented, globalized, capital intensive and profitable is a certain industry. 

These reports break down the issue of risk analysis into “easy-to-digest” chunks. Our team of sector advisors depicts weaknesses vs strengths, and presents leading players (importers, exporters and producers) and the situation in sub sectors. There are also ‘barometers’ - charts depicting sectors’ non-payment risk in the short run - from low to high. Then there are changes in ratings for specific industries in countries – from Norway to India, Saudi Arabia to Vietnam, and all the way to Brazil, China, Germany, Russia, Japan and the US. And, yes, readers are served with “what to watch” lists for 2016 and beyond. 

So, briefly, what do the Euler Hermes sector advisors think? Here’s a quick rundown of some of the main findings.

In the Construction sector growth will be shaped by a mix of divergent country trends. The report suggests businesses should keep an eye open housing prices, as some bubbles keep on inflating (China) while others are slowly deflating (France).

The car industry is going through some major shifts. Think of the rise of the shared economy, car manufacturers striking new partnerships with disruptive tech companies, and diesel scandals rocking big players. But despite the myriad challenges the Automotive sector is facing, global sales growth is stable at +3%. Bottom line: a global presence is still a must for companies to benefit from global growth. 

While low oil prices mean a windfall for some sub sectors of the Transportation sector, and as many airlines’ stretch their wings, raking in profits and purchasing new planes, not everybody can cash in on the cheap energy bonanza. Maritime shipping profits have sunk over the last year as overcapacities and low freight rates undermine sea transportation.

Over capacity, especially in China, is also an issue when it comes to Metals. Add to that the impact of collapsing demand in Brazil and Russia and you see why the steel industry, facing a decline in volumes and values, must restructure – and fast.

Ray of lights? Stakeholders of the Energy and Chemicals​ sectors might be delighted – or disappointed – by more mergers and acquisitions. In any case, the M&A trend requires careful monitoring. 

Consumers in Europe and North America will reap the benefits of retail’s search for a mixed online-offline business model (aka omni-channeling) and low energy prices. 

As for what all this means for customers, this year consumers will probably have more purchasing power than in a long time. Cold comfort for some industries, a boon for others.

Ludovic Subran

Chief Economist

Euler Hermes

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