Technology, pharmaceuticals, health care and medical devices are slated to outperform other sectors in 2021, while the underperforming oil and gas industry will see only a moderate recovery, research company Fitch Solutions said. The consumer sector, which was one of the most impacted in 2020, will see a robust recovery next year, followed by heavy industries such as mining, metals, infrastructure, power and renewables, and agribusiness, the ratings agency said in a global industries recovery outlook report. "The underperforming sector could be oil and gas, which we believe will see only a moderate recovery following a difficult year in 2020, according to the report. "Global oil prices, production and consumption in 2021 will remain well below 2019 levels." Fitch Ratings has revised its outlook on global economic growth upward as countries begin rolling out vaccination programmes to fight Covid-19. The global economy is now expected to contract 3.7 per cent in 2020 compared to an earlier prediction of 4.4 per cent, the ratings agency <a href="https://www.thenationalnews.com/business/economy/fitch-more-upbeat-on-global-economy-as-vaccine-roll-outs-begin-1.1124812">said </a>in a separate global economic outlook on Monday. The global economic recovery will spur increased oil demand while producers curb output to support higher prices and increase investment, Fitch Solutions said in the report, titled <em>Covid-19 Global Industries: 2021 Recovery Outlook – Identifying Outperforming Sectors</em>. Fitch Solutions forecast 4.1 per cent growth in fuel demand in 2021, a gain of 3.6 million barrels per day but well below the decline of 6.1m bpd estimated for 2020. "The start of 2021 may see some rough patches continue, with the current regime of increased lockdowns in several advanced economies enacted in response to second and third waves of infection," it said. "We expect that 2021 will be a year of two halves, with the bulk of demand returning in the second half of the year as Covid-19 vaccines become more widespread." Agriculture commodities are expected to see a strong pick-up in global demand in 2021, particularly for meat, dairy, cocoa and coffee, with a recovery in the restaurants and hospitality sector, Fitch Solutions said. The mining sector is also poised for a strong recovery with higher average prices in 2021, fewer disruptions to operations, and a rise in capital expenditure after firms postponed 2020 plans. Next year, metal prices will be supported by the broader and deeper global economic recovery as Covid-19 vaccines are made available, while China will drive a sharp recovery in global demand for mineral and metals in 2021. However, the global Infrastructure sector will see a mixed recovery next year, with a rebound in investment levels varying widely across markets. On a global level, the construction industry will exceed its 2019 level in real terms, driven mainly by the outperformance of Asia’s infrastructure sector. "China will stand out among markets both in Asia and globally for its robust infrastructure investment, supported by government stimulus efforts launched in 2020," the report said. In the food and drink sector, demand for e-grocery services are projected to remain strong throughout 2021 as consumers have become used to ordering groceries online and mass grocery retailers have invested in delivery and e-commerce infrastructure. In the retail sector, the easing of lockdown measures and a recovering global economy will aid consumer spending on non-essential items, Fitch Solutions said. Consumers will remain price sensitive as incomes will remain below pre-pandemic levels. Global car sales will return to growth at 8.4 per cent in 2021, following an estimated contraction of 17.6 per cent in 2020, the report said. "While this is a positive outlook for the industry, it is premature to consider it a recovery as sales volumes will remain far below pre-pandemic levels," it said. Fitch Solutions expects the offshore wind power market to increase its share within the wind sector following increased investments and expansion into new markets in 2021, while there will be a growing number of investments in hydrogen production as climate-related targets drive plans to develop commercial-scale capacity.
