Moody’s: Global Corporate Sector Faces Significant Recovery Challenges

New York, July 14, 2009 -- Despite general signs that the global economy 
is stabilizing, most corporate sectors face significant hurdles on their 
path to economic recovery, said Moody's Investors Service in the first of 
a series of new reports that look at the topic of recovery from a global 
perspective.

"Overall, conditions remain weak globally for the consumer, primarily for 
the same reasons as in the U.S.," said Moody's Senior Managing Director 
Mike Rowan. "Rising unemployment, reduced access to credit, and negative 
trends in wealth due to falling asset prices all weigh heavily on most 
developed economies."

The ratings agency's special report provides an overview of the global 
economic outlook and addresses key issues across various industries such 
as: how today's credit picture differs from that of a few months ago, 
whether improvement in credit conditions is well-established or 
precarious, and conditions that must be in place to improve credit
conditions further.

"Despite some encouraging trends, a total economic recovery is still 
early," said Rowan. For instance, as a tumultuous year for automotive 
manufacturers continues with pockets of improved sales figures in some 
regions, Moody's is maintaining its forecast for a 13% drop in global 
sales volumes in 2009, expecting car sales to range from 55 to 57 million 
vehicles.

For retail, the credit picture remains challenged, with limited evidence 
of recovery as consumers' ability and propensity to spend remain weak, 
said Moody's. At the same time, the consumer durable sector remains 
vulnerable to further economic setbacks, rising unemployment, and the 
potential for higher energy prices and interest rates. 

In addition, while the housing downturn appears to be showing signs of 
stabilization, a closer look at the indicators reveals a more sobering 
state of the industry, especially for the North American homebuilders, 
said Moody's. Elsewhere, in Brazil and China, growth seems to be back on 
track though the economic downturn and credit availability may still pose 
an impediment to a more robust and sustained recovery.

For the media industry, spending on state and local political races, the 
2010 World Cup, and a potential peak in the U.S. unemployment rate by 
mid-2010 offer hope that advertising trends will improve as the next year 
progresses, said Moody's. While the European ad markets are also soft 
with declines in a similar range as the U.S., Asia and Latin America are 
holding up better and in some cases, even growing.

This report is the first in the "Economic Recoveries" series of 
publications from Moody's Investors Service, which is available on 
Moodys.com. Companion reports examining the economic recovery of 
financial institutions, the public finance sector, and structured finance 
will be published later this week.

A teleconference on this report will be held on Wednesday, July 15, at 
10:00 AM EDT/15:00 BST/16:00 CET.