Outlooks 2022

#MoodysOutlooks

About our Outlooks

Our outlooks reflect our view of conditions in global and regional sectors and subsectors for 2022. While we take a directional view of conditions for many sectors – positive, stable or negative – for others we do not. Some outlooks also contain views on multiple subsectors where our directional views differ, so a broad directional view is not available.

Cross Sector

Corporate Finance

Positive

Aerospace & Defense – Global

We expect strong operating profit growth, driven by increasing production rates and deliveries of large commercial narrowbody aircraft. Supply chain disruptions and potential new coronavirus variants will weigh on the pace of growth.
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Stable

Automotive manufacturers and parts suppliers - Global

We expect light vehicle sales to rise 6.2% in 2022, with Western Europe bouncing back most after a tepid 2021 recovery. Parts shortages and the pandemic’s course remain risks, but we supply problems will abate and volumes recover in the second half. Read the report to understand how parts suppliers’ revenue growth will fare, as well as our outlook for global truck sales.
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Stable

Broadband - US

The industry’s organic revenue growth should average about 2.3% over the next 12-18 months, driving our stable outlook. Capital intensity will rise, driven by investments to protect and grow market share and earnings. Risks include rising competition and slower 5G or fiber infrastructure deployment.
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Stable

Chemicals - Global

Our outlook for the global chemicals sector is stable. We expect average EBITDA to return to more normal levels from a 2021 peak and financial conditions to remain supportive.
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Stable

Commodities - Latin America (includes protein, sugar ethanol and oil and gas)

Credit conditions largely unchanged overall in 2022 for all sectors except sugar/ethanol, which will improve
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Positive

Consumer Products – Global

Our outlook for the sector, which includes the beverage, consumer packaged goods, consumer durables, tobacco and packaged food sectors remains positive thanks to combined operating profit growth of more than 4% in 2022. However, performance is diverging by sector and geography.
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Stable

Consumer, Retail, Telecom - Latin America

2022 outlook stable but inflation poses hazard as consumer activity regains post-pandemic footing
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Positive

Diversified Information Technology - Global

Our 2022 outlook for the global diversified information technology sector is positive. Spending on IT infrastructure upgrades will remain strong as businesses look to increase efficiency and competitiveness
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Stable

Diversified Manufacturing - Global

We have changed the outlook for global diversified manufacturing to stable from positive, reflecting concerns about inflationary pressures on input costs
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Stable

Energy – Global

High oil prices in 2022 will support robust industry cash flow, but producers will maintain capital discipline, limiting advantages for drilling, oilfield services and midstream companies, while refining companies will benefit from rising fuel demand
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Homebuilding and Building Materials – US and EMEA

Another strong year ahead for Homebuilding – US. This reflects our expectations of solid business conditions for the sector given supportive macroeconomic environment, including low interest rates despite expected modest increases, improving employment picture, rising wages, favorable demographic trends, and remote work as an additional long-term demand driver for homes.
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Positive

Hospitality - Global (lncludes Gaming, Lodging, Cruise and Restaurants)

Global hospitality EBITDA will surge 35-40% in 2022 before easing back as conditions gradually normalize. However, the emergence of new coronavirus variants highlights how the virus remains a source of high forecast uncertainty. Read the report for insight into the 2022 outlooks for the cruise, lodging, restaurants, casinos and gaming sectors.
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Stable

Leveraged Finance – EMEA

We expect EMEA high-yield corporate bond and leveraged loan issuance to level out in 2022 with continued support from M&A activity after a record year in 2021. . Read the report to see how vaccination rates, inflation and supply disruption might affect ongoing recovery efforts.
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Stable

Metals and Mining -Global

Strong business conditions for global mining, steel and coal; high prices will likely moderate in 2022, but will remain robust, exceeding historical levels
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Stable

Nonfinancial Companies - China

China's continued economic recovery from the pandemic is supporting the stable outlook for Chinese corporates in 2022. But, slowing GDP growth, emerging risks -- from policy transition to increased regulatory uncertainties -- and tightened funding access may influence the fortunes of the sector.
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Stable

Nonfinancial Companies – Asia (ex Japan)

The stable outlook reflects a solidifying recovery, with Asia benefiting from rebounding demand from advanced economies. But policy transitions away from growth and tightening funding access are risks to this growth.
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Stable

Nonfinancial Companies – EMEA

The outlook for EMEA nonfinancial companies remains stable. This balances strong economic growth, a continued recovery in earnings and a low forecast default rate with more recent inflationary pressures and supply chain disruptions.
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Positive

Nonfinancial Companies – India

Rising vaccination rate, stabilizing consumer confidence, low interest rates and higher public spending underpin favorable credit fundamentals for nonfinancial companies
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Stable

Nonfinancial Companies – Indonesia

Credit fundamentals will remain stable in 2022 amid strength in commodity prices, a tentative recovery in consumer spending and manageable refinancing risks
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Stable

Nonfinancial Companies – Latin America

Economic activity recovering, but tightening funding environment and accelerating inflation pose risks to growth
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Stable

Nonfinancial Companies – North America

Our outlook for nonfinancial companies in North America is stable on strong demand and favorable credit fundamentals, tempered by still-evolving impact of supply demand imbalances and risk of sustained inflationary pressures
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Negative

Paper and Forest Products – Global

Our 2022 outlook for the global paper and forest products industry is negative. While we expect earnings growth in paper and paper packaging, it will be offset by the flow through of lower wood product and pulp prices.
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Positive

Passenger Airlines – Global

Pent-up demand remains strong, driving our positive outlook. We forecast passenger volumes to return to 2019 levels through 2023. However, the spread of new coronavirus variants will periodically weigh on bookings, temporarily slowing the pace of recovery.
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Positive

Pharmaceuticals - Global

The global pharmaceutical industry’s operating earnings will grow 4%-6% in 2022, driving our positive outlook. Solid underlying fundamentals reflect rising use of innovative medicines and continuing rollout of COVID-related products
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Negative

Property - China

Our outlook for the China property sector is negative as funding access will remain tight during the next six to 12 months due to tightened regulations and increased risk aversion stemming from China Evergrande’s financial distress and defaults by several other property developers.
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Stable

REITs and REOCs - Global

We have changed our outlook for REITs and REOCs in the US and Europe to stable from negative as rental income growth strengthens. Logistics and tech infrastructure will perform most strongly, with retail performance remaining weak for the next 12-18 months.
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Stable

Retail and Apparel - Europe

Median sales and EBITDA growth remain strong, but we our outlook remains stable because inflation and supply chain woes will curb recovery. The recent resurgence in coronavirus cases increases risks to our forecasts.
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Stable

Retail and Apparel – US

As consumers’ pent-up demand eases and cost pressures rise, retail operating income growth is set to slow in 2022. Consumer spending on travel, leisure and entertainment is also likely to take a greater share of wallet. At the same time, the pandemic continues to fuel uncertainty as new virus variants such as Delta and Omicron emerge.
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Stable

Shipping - Global

We have changed the outlook for the global shipping industry to stable from positive on the back of peaking earnings during 2021. However, we expect earnings to still be considerably higher than pre-COVID-19 levels during the next 12 months.
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Stable

Telecommunications – Asia Pacific

Revenue growth and positive free cash flows keep the outlook stable. Competition and scale benefits will drive consolidation in 2022-23. Free cash flow will also turn positive despite high capital spending as companies rein in shareholder returns.
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Negative

Telecommunications – Europe

The outlook for telecom operators in Europe remains negative because we expect only marginal revenue growth in 2022.
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Financial Institutions

Stable

Asset Management - Global

The outlook remains stable in an improving macroeconomic environment. Growing demand for ESG and alternatives, adaptation to changing client preferences with investments in technology and M&A, and rising digital engagement are all adding support to industry credit conditions.
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Stable

Banks - Emerging Markets

Stable credit conditions support EM bank fundamentals in 2022
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Stable

Banks - US & Canada

Continued moderate real GDP growth and lower unemployment will support borrowers’ credit quality, and banks have ample loan loss reserves to cover a potential rise in net charge-offs. Capitalization will decline because of shareholder payouts, but remain adequate to buffer stress losses. Robust funding and liquidity will help protect banks against market shocks.
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Negative

Banks – Africa

Subdued recovery, loan quality deterioration and higher sovereign debt pose challenges for African banks over 2022
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Stable

Banks – Asia Pacific

Improving economic conditions, and good capital and liquidity buffers underpin stable outlook for APAC banks
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Stable

Banks – Europe

We maintain a stable outlook for most European banking systems as operating conditions consolidate following the sharp rebound in 2021
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Stable

Banks – Global

Solid capital, low credit losses and sound liquidity support the stable outlook for banks globally. Risks include a global economic slowdown, high global debt levels and the effects of unwinding government and monetary support measures
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Stable

Banks – Gulf Cooperation Council

Outlook for GCC banks is stable as the region’s economies recover
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Stable

Banks – Latin America

2022 outlook for Latin American banks is stable
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Stable

Closed-End Funds – US

The stable outlook reflects the economic recovery underway, the sector’s solid asset coverage ratios, and supportive financial conditions that will keep financing costs relatively low over the outlook period
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Stable

Finance Companies - Global

Most issuer outlooks are stable
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Stable

Financial Institutions - China

Our 2022 outlook for Chinese financial institutions is stable, driven by stable outlooks on banks, life insurers, securities companies and leasing companies, despite negative outlooks on asset management companies and non-life insurers.
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Stable

Global insurance

Rising long-term interest rates will alleviate persistent erosion in of insurers’ portfolio yields. Nonetheless, global insurers will continue to lower their dependence on interest rate spreads, accelerated by the global shift in new business mix and the sale of legacy policy portfolios in the US and Europe.
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Stable

Health insurance - US

Key credit themes for health insurers in 2022
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Stable

Insurance - Nordics countries

Our outlook on both Nordic P&C and life insurers is stable
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Stable

Insurance – Europe

Our stable outlook for European life insurers reflects the economic recovery and the sector’s efforts to optimize its business mix. Our negative outlook for the P&C sector reflects profitability pressures as claims frequency and inflation rise.
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Positive

Insurance Brokers – Global

2022 outlook positive as brokers ride economic growth and favorable P&C rates
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Stable

Life Insurance – US

2022 outlook stable, as US economic recovery solidifies
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Stable

Money Market Funds – Global

Moody’s money market fund outlook is stable, previously negative
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Stable

Mortgage Insurance – US

2022 outlook remains stable as economy recovers and pandemic risks recede
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Negative

Property & Casualty Insurance - Italy

Outlook turns negative, underwriting performance to weaken in 2022
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Stable

Property & Casualty Personal Insurance

2022 outlook stable despite inflation-driven increase in auto and home loss severity
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Stable

Reinsurance – Global

Our outlook on the global reinsurance sector is stable. Reinsurance price increases amid a global economic recovery will support reinsurance earnings. The sector’s capitalization remains healthy, underpinning its credit strength.
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Stable

Securities Firms & Market Infrastructure Providers – US

Our 2022 outlooks are stable for the three subsectors among US securities firms & market infrastructure providers
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Project & Infrastructure Finance

Positive

Airports – Europe

2022 Outlook revised to positive in wake of traffic recovery
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Stable

Infrastructure - Australia

2022 outlook stable as social restrictions abate and business conditions improve
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Stable

Local Governments

2022 outlook stable with solid revenue growth and influx of federal aid
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Stable

Power - Asia-Pacific

2022 outlook stable as regulatory frameworks balance cost and ESG pressures
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Stable

Public Power Electric Utilities – US

2022 outlook stable as financial metrics and load demand stabilize
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Stable

Public-private partnerships (PPP) – EMEA

2022 outlook stable as performance remains satisfactory
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Stable

Regulated Electric & Gas Networks - Europe

2022 outlook stable, with limited changes to key regulatory parameters
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Stable

Regulated Electric and Gas Utilities – US

2022 outlook stable on sustained regulatory support for robust investment cycle
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Stable

Regulated Water Utilities – UK

2022 outlook stable as regulatory certainty balances environmental and social risks
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Stable

States – US

2022 outlook stable as fiscal momentum set to offset lingering economic risks
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Positive

Toll Roads – Europe

2022 outlook changed to positive on recovery in traffic volumes
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Positive

Toll Roads – US

2022 outlook positive; strong GDP and CPI growth drives traffic and revenue growth
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Positive

Transportation Infrastructure and Project Finance

2022 global transportation infrastructure and project finance outlooks
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Stable

Unregulated electric and gas utilities – EMEA

2022 outlook stable as intervention risk, high capex overshadow earnings growth
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Stable

Unregulated Utilities - US

2022 outlook revised to stable as higher demand supports power prices
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Positive

US Airports

2022 outlook remains positive as domestic travel recovery continues
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Positive

US Public Ports

2022 outlook remains positive on elevated cargo volume and revenue
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Stable

Utilities and Power – Global

2022 outlooks – US utilities and power companies
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Regional & Local Government

Negative

Regional & Local Governments – China

Our outlook for Chinese RLGs is negative, driven by a number of factors including lower land sale revenues and higher debt issuance to fund infrastructure spending. Regional growth will be uneven, reflecting varied economic fundamentals and carbon transition risks. Find out why RLG funding gaps will widen in the coming year.
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Stable

Regional & Local Governments – France

Our 2022 outlook for French regional & local governments (RLGs) is stable given the strong growth recovery, the normalisation of operating spending and stable debt burdens.
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Stable

Regional & Local Governments – Italy

Our 2022 outlook for Italian regional and local governments (RLGs) is stable given the expected recovery in tax revenue, still sizeable central government support and continued deleveraging.
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Stable

Regional Governments – Spain

Our 2022 outlook for Spanish regional governments is stable, reflecting healthy revenue growth, access to sizeable funding support and low borrowing costs. However, spending pressures are building and debt levels remain high.
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Stable

Regional Governments (Länder) – Germany

Our 2022 outlook for German regional governments is stable, reflecting a continued economic recovery that will increase tax revenue, reduce fiscal deficits and contain planned debt accumulation.
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Stable

UK Housing Associations

Our outlook for UK housing associations (HAs) in 2022 is stable, underpinned by a supportive operating environment, higher turnover and robust liquidity. However, growing costs pose challenges.
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Negative

中国地方政府 (Chinese translation)

鉴于土地出让金收入将下滑,以及至少短期内政策重新转向举债刺激经济增长的预期,我们对2022年中国地方政府的展望为负面。
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Structured Finance

 

ABCP - US

The credit quality of US asset-backed commercial paper (ABCP) will remain strong in 2022, reflecting support providers’ financial health. Consumer financing will remain the leading asset type and economic growth will uphold outstandings.
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ABCP — EMEA

Conduit credit quality will remain robust on support providers’ strength. Meanwhile, trade receivables will continue to dominate programs’ outstandings.
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CLOs – EMEA

Current trends in leveraged lending, CLO documentation and performance will continue into 2022, with issuance set to remain strong. Meanwhile, ESG considerations will proliferate.
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CLOs – US

Current trends in leveraged lending and CLO documentation and performance will continue into 2022 following a postpandemic boom in 2021. ESG considerations will proliferate, while Libor transition may slow CLO issuance early on.
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CMBS – EMEA

2022 Outlook — Collateral quality and performance bifurcation by property type will continue
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CMBS and CRE CLOs – US

2022 Outlook — Recovery will aid new deals; risk remains for outstanding deals with the pandemic's hardest-hit assets
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Consumer ABS – US

The positive credit effects of pandemic-sparked consumer support and caution are fading. Fallout from normalizing conditions and evolving credit policies will depend on the degree to which lender maintain discipline and household strength endures.
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Corporate ABS – US

Asset quality will stay strong, waning pandemic fallout will aid performance.
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Covered Bonds – Global

2022 Outlook - Stable issuers, strong assets and new rules will support credit quality
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RMBS – US

The recent home price boom and solid economy will support residential mortgage-backed securities (RMBS) performance but also expand risk in new transactions. Read the report to understand how stretched affordability and increased lender competition as refinancing declines will likely probably weaken underwriting.
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RMBS and ABS – EMEA

2022 Outlook – Underwriting will normalize while improving economies aid performance
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Structured Finance - Canada

As pandemic strains ease, lower unemployment will help uphold new deal credit quality and existing deal performance.
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Structured Finance – Australia

Solid economic growth will support stable asset performance for Australian structured finance deals in 2022, but rising debt burdens and possible interest rate rises will be a risk
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Structured Finance – China

Economic conditions will sustain stable asset performance for outstanding Chinese structured finance deals, though rising household debt and the property sector slowdown will be risks. Loan quality for new deals will vary by asset class
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Structured Finance – Europe

Credit quality, performance will continue to normalise amid economic recovery
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Structured Finance – Global

2022 Outlook — Strong asset performance will continue despite COVID-19 uncertainty
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Structured Finance – Japan

2022 Outlook - Ongoing economic recovery will be positive but growing inequalities pose risks
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Structured Finance – Mexico

Mexico’s structured finance sector will benefit in 2022 from the continuation of automatic payroll deductions for residential mortgage-backed securities (RMBS), which dominate the market. Meanwhile, improved labor market conditions will support existing deal performance, though some still-struggling borrowers will default.
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Sovereign

Stable

Global Sovereign Outlook

Economic recovery drives stable 2022 outlook for global sovereigns amid ongoing pandemic costs
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Coming Soon

MDBs Outlook

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Stable

Regional Governments – Australia

Our 2022 outlook for Australian regional governments is stable on strengthening revenue as vaccine rollout facilitates reopening of local economy and international borders; rising debt burdens pose a challenge
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Stable

Regional Governments – Canada

Our 2022 outlook for Canadian regional governments is stable, reflecting normalized economic activity and our expectation of continued federal support to workers, businesses and provinces in case of slower-than-expected growth
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Stable

Sovereigns - Asia Pacific

Roughly half of APAC economies will undergo a growth rebound in 2022, but differing degrees of exposure to vulnerable sectors and disparate approaches to reopening will result in a multispeed recovery. Debt burdens will peak in 2022 and stabilize for most APAC economies at higher levels than before the pandemic. Read the outlook to understand how normalization will involve difficult policy choices for many governments.
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Stable

Sovereigns – Central & Eastern Europe

2022 outlook stable as strong economic activity and resilient fiscal metrics mitigate structural challenges
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Stable

Sovereigns – Commonwealth of Independent States

Stable outlook on economic recovery and beginnings of fiscal repair; pandemic and politics remain key risks
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Stable

Sovereigns – Euro area

2022 outlook is stable given favourable economic and monetary conditions, but debt levels will remain elevated for many
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Stable

Sovereigns – Gulf Cooperation Council

2022 outlook stable on supportive oil prices, higher production; carbon transition momentum magnifies longer-term risks
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Stable

Sovereigns – Latin America & Caribbean

2022 outlook stable as growth recovers and debt levels stabilize; political risks rising
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Negative

Sovereigns – Levant and North Africa

2022 outlook negative amid weak economic recovery and growing social discontent
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Negative

Sovereigns – Sub-Saharan Africa

2022 outlook negative amid fragile recovery, persistent external risks and limited scope for adjustment
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US Public Finance