... of most of the diversified industrials and capital goods sector's end-markets resulted in materially pressured revenue and profitability in 1H20 due to production halts and economic uncertainty. However, for some end-markets, such as automotive, transportation and energy, the recovery came earlier and stronger in 2H20 than Fitch Ratings had anticipated, while aerospace and oil and gas remain subdued. Although the recovery continued in 1H21, driven by pent-up demand and megatrends such as digitalisation, urbanisation and the electrification of vehicles, we expect the recovery to be uneven across end-markets and, to some extent, affected by supply-chain disruptions. Rating Outlooks Stabilise: The higher share of Negative Outlooks in the sector in late 2020 were mainly among non-investment-grade issuers. We expect most of these Outlooks to stabilise in 2021 as markets recover. We expect some cost savings implemented during the pandemic to...
