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Signs of economic recovery have led Coface to place the A2 assessment of the United States under positive watch and to remove the negative watch on Japan’s A1 assessment.

Coface country risk assessment measures the average level of payment defaults by companies in a given country within the framework of their commercial transactions. It does not pertain to sovereign debt.

The confidence and consumption of American households are picking up, despite rising petrol prices and the stagnation of disposable income. The improvement in the labour market now involves a significant number of states, but the pace remains insufficient to rapidly decrease unemployment.

Generally, corporate debt levels are very low and companies are highly profitable. In 2011, corporate investment increased. However, American SMEs remain fragile due to their difficulties in obtaining credit. Coface notes a good performance in its payment experience with American companies.

After the abrupt downturn following the catastrophic events of March 2011, the Japanese economy is expected to recover, driven by domestic demand and stronger exports. Exports, the traditional engine for Japanese growth, will benefit from the recovery in US economic activity and from the vitality of emerging Asian countries.

Even in an environment of economic contraction, the payment behaviour of Japanese companies has remained positive, says Coface.

Meanwhile, European companies are still in turmoil, notably in Portugal. Coface observes a marked deterioration in the financial situation of Portuguese companies. The country’s recession is likely to deepen even further in 2012 (-4%). 

The growth forecasts for 2012 for Italy and Spain have been revised to -1.5% and -1.2%, respectively. In January 2012, Coface downgraded these two major euro zone economies to A4 and its payment experience with these countries continues to deteriorate in early 2012.

Coface observes a marked deterioration in the financial situation of Portuguese companies. The country’s recession is likely to deepen even further in 2012 (-4%).

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