Credit Benchmark have released the August Credit Consensus Indicators (CCIs). The CCI is an index of forward-looking credit opinions for US, UK and EU Industrials based on the consensus views of over 20,000 credit analysts at 40+ of the world’s leading financial institutions.
Drawn from more than 950,000 contributed credit observations, the CCI tracks the total number of upgrades and downgrades made each month by credit analysts to chart the long-term trend in analyst sentiment for industrials. A monthly CCI score of 50 indicates neutral credit quality, with an equal number of upgrades and downgrades made over the course of a month. Scores above 50 indicate that credit quality is improving. Scores below 50 indicate that credit quality is deteriorating.
UK Industrial firms are in a positive position for the second time this month, but they have been unable to maintain a consistent trend since mid-2021. EU Industrial firms have registered another positive CCI for this month, which is the eleventh consecutive instance of a positive score. This month US Industrial firms ended their streak of 17 consecutive months of positive credit quality.
UK Industrials: Ups and Downs
UK Industrial firms are in a positive position for the second time this month, but they have been unable to maintain a consistent trend since mid-2021.
The UK CCI score is 50.5 this month; a small drop from last month’s CCI of 51.4.
British manufacturers suffered their first drop in output in over two years in July-22, as new orders and fresh export business both continued to decline.
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EU Industrials: Hanging On
EU Industrial firms have registered another positive CCI for this month, which is the eleventh consecutive instance of a positive score.
The EU CCI score hovers above neutral at 50.5 this month. While the ongoing run of net positive scores bodes well for the group, the trend remains modest and keeps dipping close to neutral.
The eurozone manufacturing sector has fallen into contraction in July-22. Factories recorded the sharpest drop in production since the initial wave of strict COVID-19 lockdowns in May 2020.
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US Industrials: A Change in Trend
This month US Industrial firms ended their streak of 17 consecutive months of positive credit quality.
The US CCI score this month is 47.8, a significant drop from last month’s CCI of 51.8.
US manufacturers are likely to see a hit to their quarterly profit in the second half of the year as higher prices for everything take a toll on consumer spending.
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