Medium & long-term knock-on effects of the war in Europe on global sectors trends: will there be resilient sectors?

Even though we see disparities according to companies’ position in the supply chain or geographic location, all 13[1] sectors studied by Coface will keep on being impacted by the knock-on effects of the war in Ukraine, directly or indirectly, in the medium to long term. Most sectors are expected to be affected by a context of high commodities prices & supply issues exacerbated by the war. This is notably the case for high oil prices that are likely to keep on being fueled by the spillover effect of the ban on Russian oil announced last week by the EU[2] commission; as well as for cereals (Ukraine, Russia & Belarus being large cereal producers). In a context of ongoing disruptions in semiconductors supply, and still spillover effect of the COVID pandemic as shown by the Shanghai port lockdown, the longer the war lasts, the more likely it is that a demand shock will materialize, making the global environment even more adverse.

Therefore, the most impacted sectors are expected to be the most cyclical & energy intensive ones such as petrochemical[3], transport, automotive, paper, textile-clothing & agri-food. Looking forward, we expect the most resilient ones to be the media (an ICT[4] segment), a segment of specialty chemicals, and the pharmaceuticals.  

[1] Coface sector risk assessment methodology includes 13 sectors: Agri-food, Automotive, Chemical, Construction, Energy, Information and Communication Technology, Metals, Paper, Pharmaceuticals, Retail, Textile- Clothing, Transport, Wood. 

[2] As part of a new round of sanctions against Russia. This ban is planned to be gradually implemented toward the end of the year. 

[3] In Coface’s sector risk assessment methodology, the chemicals sector comprises 3 sub-segments: petrochemicals, specialty chemicals and fertilizers. 

[4] Coface’s sector risk assessment methodology for the Information and Communication Technologies (ICT) sector incorporates several segments: telecommunications, electronics, media segment & a final one composed by computers, software and IT equipment.