The most stringent period of lockdown is over for many jurisdictions, signalling the start of a challenging period of reopening, according to Fitch Ratings, which has published a sector-by-sector analysis of its assumptions for the road to recovery, for more than 80 corporate sectors and subsectors globally.

It has projected revenue-recovery curves for corporate sectors, and through using its baseline scenario, Fitch Ratings confirms that there will be “a slow and halting recovery process” for many sectors.

Its recovery narrative suggests revenue destruction of more than $5-trillion this year, compared with the $26-trillion of revenue reported by its corporate portfolio in 2019, and extending to more than $8.5-trillion of revenue destruction by end-2021. 

This estimate only covers Fitch Ratings’ corporate rated portfolio, which in turn represents about $14-trillion of the estimated $74-trillion corporate debt globally.

The oil and gas sector accounts for most of the revenue destruction in dollar terms, representing 40% of the aggregate revenue fall. While the oil price has recovered from historic lows, pricing is still well inside the consultancy’s price-deck estimates. Therefore, Fitch Ratings expects economic sentiment to remain subdued after the initial post-lockdown euphoria dissipates.

Its projected decline in car sales of about 20% globally this year (followed by a recovery of around 15% in 2021) makes the automotive sector the second-largest revenue victim after oil and gas, albeit by a large distance.

Further downside revision is possible if demand for big-ticket items weakens further, Fitch Ratings says.

The most severe relative declines for any sector occur in the leisure and transport sectors, for which the consultancy projects revenue losses of between 40% and 60% this year. 

Although the underlying segments account for a relatively minor share (3%) of the aggregated global corporate revenue in the consultancy’s portfolio, “they have a disproportionate contribution to employment in the wider economy”. 

The report also identifies a range of sectors and subsectors that Fitch Ratings expects to prove resilient during the post-lockdown period, including telecoms and individual segments within technology, healthcare and even retail.

The range of region-specific variations it analyses in its report “do not meaningfully change the shape of the global recovery curve”, with all regions generally adhering to a global pattern of a slow recovery from a “traumatic” first half of 2020.