...Cyclical Downturn The 2016 outlook for the diversified industrials and capital goods sector is negative, though most Rating Outlooks are Stable. Sales at most companies have declined due to a combination of low or negative organic growth and the negative impact of currency exchange rates. The predominant trend is negative for industrial equipment and capital goods, and there is no clear indication yet of when conditions may improve, especially in end markets such as mining and oil and gas that are the biggest drivers of demand. Conditions could remain weak through 2016 and into 2017. However, some end markets are positive, including commercial aerospace and U.S. construction. Slower Emerging-Market Growth Slower growth in China and other emerging regions is contributing to persistently lower commodity prices and a reduction in demand for capital goods. It also is reducing an important source of growth for diversified industrial companies, which have relied on emerging markets to offset...
