IHS Global Insight Ranks Those Industry Sectors Best Positioned for Recovery from the Great Recession
October 20 2009 - 9:00AM
Business Wire
The healthcare and consumer staples sectors of the U.S. and
Eurozone economies are the industries in the best position for
recovery from the Great Recession, while the consumer discretionary
sector in the U.S. and the materials sector in the Eurozone are the
least well positioned, according to the head of IHS Global
Insight's World Industry Service.
For the BRIC countries – Brazil, Russia, India, and China –
information technology and telecoms are in the best position,
energy least well positioned.
Healthcare and consumer staples have a demand base that
typically remains steadier through an economic downturn, yet they
also bounce back more quickly in a recovery, in part because many
of the leading companies in the sectors have strong balance sheets
and are not directly vulnerable to the lingering effects of the
credit crunch, said Mark Killion, managing director of the IHS
Global Insight World Industry Service. Killion is scheduled to
present an update of the World Industry Service sector report today
at the IHS Global Insight World Economic Outlook Conference in
Boston.
While telecoms and technology are more economically sensitive,
they have fared relatively well in the current recession,
especially in China and the rest of Asia. The hardware part of
technology has been hit very hard in the U.S. and Eurozone.
Software has performed well globally, with notable strength in the
U.S. and India, and many IT firms have very strong balance
sheets.
Killion said the World Industry Service downgraded the prospects
for consumer discretionary spending in the U.S. and Eurozone where
household spending has been hit by weak employment, rising
unemployment and depleted wealth. "Even a slowly recovering economy
will not bring relief to industries in a long-term structural
decline, such as textiles, apparel and tobacco, and in the
automotive sector, the incentive programs that boosted sales have
now expired."
However, China and India, by contrast, are experiencing
explosive year-on-year growth rates in auto sales.
Lastly, Killion said a global capacity overhang threatens
segments of the industrial sector, particularly those industries
manufacturing capital equipment, despite the boost from government
stimulus spending on infrastructure. A further deterioration in
commercial construction will affect building materials, steel and
related construction equipment.
Sectors Ranked by Recovery
Potential (BPFR)(Best = 1, Worst = 10)
AllCommercialSectors
U.S. Sales
Eurozone Sales
BRIC Sales Trill. US$ 25.2 Trill.
Euro 22.1 Trill. US$ 17.2 BPFR
Share % BPFR Share % BPFR Sector %
Energy 8 5.1 9 3.6 10 8.1
Materials 8 5.1 10 7.2 9
16.5 Industrials 4 24.3 3 31.7 6
27.2
ConsumerDiscretionary
10 27.8 6 24.2 3 20.7
ConsumerStaples
2 3.2 2 4.3 4 5.2 Health
Care 1 7.1 1 7 4 3
Financials 6 18.2 7 13.5 8
7
Info.Technology
5 3.4 3 3.3 1 5.2
Telecoms 3 3.7 3 2.4 1
2.7 Utilities 7 2 7 2.7 6
4.4
Media Note – Dial-In service available for those journalists
wanting to tune into Mark Killion's presentation Tuesday, October
20, at 4 p.m. (Eastern). Members of the news media interested
in using the dial-in connection can do so free of charge by
contacting Jim Dorsey at jim.dorsey@ihsglobalinsight.com or
339-223-5670 or Kate Smith at katherine.smith@ihsglobalinsight.com
or 339-788-0331.
The World Economic Outlook Conference, widely considered the
leading forum on the direction of the global economy for more than
20 years, will offer critical assessments and analyses by IHS
Global Insight experts, top academics, and industry leaders of how
the economic environment will affect countries and industries.
IHS Global Insight is an IHS Inc. (NYSE: IHS) company.
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