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The riskiest business industry in the world – metallurgy

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUIn four out of six world regions of the world, risk assessment has been increased to very high, according to the latest industry risk assessment by Coface.

Some improvements are noted in Europe. However, risks continue to increase in Asia and Latin America.

Risk assessment for metallurgy has been changed a second time since the end of 2015. Credit risk in this industry is now very high in Latin America, the Near and Far East. The change in risk assessment came as a result of a recent price drop for ferrous and non-ferrous metals, which directly impacts revenue of companies. This makes metallurgy the riskiest industry in the world.

«Industries dependent on company investments are at risk the most at the moment, especially in Asia, Latin America and North America. Industries at risk the least are one related to household consumption,» – notes Coface Director in Latvia Arnis Blumfelds. ‘Another reason for instability, aside from fluctuations of the financial market and low oil prices, comes from in weak international trade growth indexes. They significantly affect transporters, especially in the shipping sector. Latvian ports have experienced a major decline in cargo turnover in the past three months, which can be explained with the economic situation in Russia, low energy resource prices and mutual sanctions between Europe and Russia.’

Although complications in the world’s economy have affected all regions of the world, Europe experiences some positive impulses. Risks in Central Europe are some of the lowest in comparison with other regions. The main growth engine in Western Europe is growth of consumption. Development perspectives of the automobile industry are considered beneficial. Risk assessment of this sector has improved. Positive changes have also affected the pharmaceutical industry, providing this sector stable growth even under the continued ageing of European residents and the end of the fiscal austerity policy. The textile and clothing industry’s risk assessment in Western Europe has been increased to high risk.

Signs of electronics market over-saturation are currently noted in emerging Asian countries. This especially applies to personal computers and tablets, whose sales continue to decline.

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