Mid-market corporate risk shows improvement in 2018

The tailwinds from the global economic recovery, greater discipline around capital expenditure and overheads along with a sound labour market and the possibility of interest rates remaining low, show a green light for Australian corporate credit risk in 2018. This reflects an improvement in the credit outlook from our release in May 2017 where data previously reflected a softer growth.

All sectors registered an improvement in credit risk fundamentals and recording an improvement since May 2017. Low interest rates, a falling unemployment rate and population growth have contributed towards higher consumer spending, in the retail sector in particular, registering three years of sequential credit profile improvements. This sector, however, remains vulnerable to disruption and structural shift with the entry of Amazon.

The construction and building sector has seen a steady rollout of infrastructure projects in NSW, creating a tailwind for the sector. While the demand in apartment construction weakens, this is offset by the buoyant demand in engineering services and contributes towards a more stable outlook overall.

The full report can be accessed here: 

NOTE: The MMRI is an index of corporate credit ratings and credit scores assigned by Equifax Credit Rating – a licenced, Australian domiciled Credit Ratings Agency.