Moody’s 2026 outlooks indicate that corporate credit conditions will be stable across the board, supported by steady earnings, gradual deleveraging, and more predictable financing costs.
Our latest installment in Moody’s 2026 Outlooks series covers corporates outlook across 5 regions: North America, EMEA, LatAm, China, and APAC (excluding China). |
North America Corporates 2026 Outlook
North America leads an optimistic, stable outlook, with easing inflation and gently falling interest rates expected to boost profits for most U.S. and Canadian companies. However, downside risks, from volatile U.S. trade policy to a cooling economy and wary consumer behavior, could test the resilience of North American corporates and cap gains.
Key Highlights:
- Policy uncertainty and consumer weakness: Volatile U.S. trade policies and cautious consumer behavior, especially among lower-income households, are limiting pricing power and hurting demand across retail, restaurants, housing, and consumer goods sectors.
- Housing market strain: Affordability challenges will spur a 3% decline in new home sales and a 4% decline in single-family housing starts, with builders offering incentives and smaller homes to attract buyers, impacting margins and revenue.
- Trade frictions and sector exposure: Tariffs remain a key credit driver, disproportionately affecting companies selling discretionary goods like autos and apparel, while trade policy unpredictability continues to pressure freight, packaging, and manufacturing.
- Elevated credit risks: Moody’s forecasts speculative-grade defaults easing to 3.8% by end of year, but risks remain high (1.7%–8.3% range through October 2026), with highly leveraged sectors and those facing margin compression being the most vulnerable.
China should see stable growth aided by tech-driven revenues, ongoing debt deleveraging, and pro-growth policies aimed at “higher-quality” expansion. However, lessened domestic demand and a weak property sector still weigh on Chinese corporate profits, and the risk of a renewed US–China trade flare-up remains uncertain. These factors could limit visibility into growth and credit metrics for Chinese companies, despite stable conditions.
The 2026 outlook for nonfinancial companies in EMEA is stable, supported by modest economic growth and easing financial conditions. While geopolitical tensions and trade policy uncertainty persist, their impact has been limited so far. Sectors such as defense and infrastructure are poised to benefit from increased spending, while autos, chemicals, and energy continue to face headwinds.
APAC (excluding China) Corporates Outlook 2026
We maintain a stable outlook for APAC corporates in 2026, backed by steady GDP growth, resilient earnings, and supportive financing conditions. Geopolitical tensions and trade policy shifts will continue to shape investment and supply chain strategies. Technological innovation, especially in AI and digital infrastructure, presents significant growth opportunities across multiple sectors.
LATAM Corporates Outlooks 2026
Latin America’s corporate credit conditions are expected to remain broadly stable in 2026, though economic growth will be subdued and inflation elevated. Political polarization, trade uncertainty, and environmental risks will continue to shape investor sentiment and corporate performance. Digital transformation and evolving financial markets offer new opportunities, but execution risks and policy shifts remain key concerns.
From outlook to action: Get more from Moody’s Research Assistant
Moody’s Research Assistant is a GenAI platform designed to streamline access to Moody’s data and research, offering faster insights across geographies and sectors. It helps you analyze trends around growth resilience, policy divergence, trade dynamics, refinancing risks, and more.
Below are tailored sample prompts to help you explore the most pressing themes from the North America Outlook 2026:
Why is this prompt important? 2026 will test corporate resilience—Moody’s sees a stable outlook, but warns of mounting downside risks. Volatile U.S. trade policies, slowing economic momentum, and cautious consumers could weigh heavily on earnings. This prompt helps you pinpoint which sectors—like retail, housing, and autos—are most exposed to tariff shocks and affordability pressures.
Why try this prompt? It’s critical for understanding where policy uncertainty and consumer weakness intersect, so you can anticipate credit stress and adjust sector exposure before risks materialize.
Why is this prompt important? Default risk remains elevated—Moody’s baseline sees speculative-grade defaults easing to 3.8% by year-end, but forecasts a wide range of 1.7%-8.3% through October 2026. This prompt helps you explore why U.S. rates will stay above global levels and how distressed exchanges could shape the credit landscape.
Why try this prompt? It’s essential for stress-testing high-yield portfolios and gauging refinancing risk in a market where liquidity is available—but at a price.
Why is this prompt important? Housing faces another tough year—Moody’s projects new home sales down 3% and single-family starts off 4% in 2026 as affordability challenges persist.
Why try this prompt? It’s key for assessing ripple effects across construction, building products, and mortgage lending—and for spotting early signs of recovery tied to rate cuts.
Why is this prompt important? Lower rates and easing inflation should lift margins—but not uniformly. Moody’s expects modest EBITDA growth across most industries, tempered by tariff-driven cost pressures and soft consumer demand. This prompt helps you examine which sectors will benefit most from falling borrowing costs and where upside remains capped.
Why try this prompt? It’s vital for understanding how macro tailwinds translate into earnings resilience—and where policy and trade frictions could blunt the impact.
For more prompt ideas and detailed guidance, you can also visit our Research Assistant prompting hub.
As the global economic environment becomes more fragmented and complex, timely analysis and forward-looking perspectives are essential. Moody’s remains committed to providing the insight and tools you need to navigate uncertainty and seize new opportunities in 2026 and beyond. For more research, insights, and forecasts for the year ahead, explore the Outlooks hub.