The European aerospace industry will be the bright spot for credit quality next year, while other industries are prone to deterioration on slower global growth, according to Standard & Poor’s.
Aerospace and defense is the sole area among 29 industries covered by S&P that has a “positive to stable´´ sector outlook for the coming six to 12 months, S&P analyst Tobias Mock said in Frankfurt today, while the outlook for utilities and steel is the worst.
‘‘Commercial aviation stands out due to the long cycles in this industry,´´ Mock said. ‘‘Companies in this area are not suffering from declining demand due to their large order books, and because they have not ramped up capacity the same way other industries have.´´
The default probability of European companies across all industries rated below investment grade will rise to 6.8 percent by December 2013, from 6.3 percent in September as Italy and Spain remain in recession and the euro-area economy will stagnate, S&P said today. S&P rates 950 companies in Europe.