S&P Global Ratings' Industry Credit Outlook Update 2025 series provides a comprehensive overview of our industry experts' assumptions and credit outlook for global industries. Drawing on assessments of over 5,500 corporate and infrastructure entities worldwide, these reports outline our industry credit views, including ratings trends, key assumptions for the year ahead, and an analysis of critical risks and opportunities relative to our base case scenario. Our analysts expect positive revenue and cash flow growth for most sectors, a continued focus on investment in AI and energy transition, and an upturn in M&A in some sectors. Risks include the impact of tariff and trade policies, sustained cost pressures, and uncertainty around the trajectory of interest rates.
Foreign carmakers are losing market share in China more quickly, while suppliers face pressure to diversify with domestic OEMs, which may reduce returns as they compete with local leaders.
Trump’s second term as U.S. president revives fears of new trade tariffs on imported vehicles from Europe, Mexico, and Canada, complicating the challenging market for OEMs and suppliers.
Europe's slowing EV adoption raises the risk of weaker margins for automakers due to uncertainty about government support for the transition through incentive schemes.
READ MOREIt's uncertain if still-fairly resilient discretionary travel and leisure spending will hold amid possible tariffs, labor constraints, and slower pace of further Fed easing.
Revenue and EBITDA for boats, RVs, powersports, and motorcycles are far below our base case because of high prices and interest rates. but retail sales have fallen so far they have likely reached a trough for most products.
Spending is being reined in at casinos in some markets where low-income consumers reduce entertainment budgets.
READ MOREDomestic and industrial energy demand is rising. Additionally, LNG export capacity is doubling, and data centers are growing, providing opportunities for gas-focused midstream companies.
More-benign regulation provides a potential tailwind. The Trump administration could create a more-favorable operating environment for midstream companies and oil and gas industry.
Credit trends are positive. Creditworthiness continues to improve across the portfolio as companies focus on strong balance sheets and smaller growth projects.
READ MOREE&C issuers will grow at a more moderate pace in 2024 and 2025, relative to their peak levels in 2022 and 2023. Most are poised to expand over the next several years, supported by the sound infrastructure spending in most regions amid favorable project funding conditions, the energy transition, and the exponential demand for data centers. Conversely, in China we expect the E&C sector's output will rise by the low-single digit percent area in 2025 on a high base and declining new orders
READ MOREU.S. tariff on tech imports, should they be implemented, could seriously affect IT consumption from consumer-focused PCs and smartphones to enterprise hardware demand. The tech industry is diversifying its supply chain but is still heavily dependent on China.
READ MOREWe expect capacity markets to remain tight, and potentially tighten further, before supply catches up. Energy markets remain well supplied.
We believe all power generators with legacy assets benefit from increased power use.
The competitive renewable segment is under credit pressure while conventional generation companies ride tailwinds. We may see a ratings barbell: upgrades in conventional and credit pressure for renewables.
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