Skip to content

Learn about the most resilient sectors in the face of the pandemic

October 29, 2020

According to the credit insurer Atradius, the food, electronics-ICT and chemical-pharmaceutical sectors are the most resilient.

3 min read

Learn about the most resilient sectors in the face of the pandemic
Learn about the most resilient sectors in the face of the pandemic

The Mexican economy, like the global economy, is in a complicated position due to the COVID-19 pandemic. However, there are sectors where the impact is lower or which resists well, such as food, electronics ICT or chemical-pharmaceutical, according to credit insurer Atradius.

In its report on the performance of the Mexican industry, the Spanish company highlights that food and soft drinks spending will continue to perform well through 2020 as consumers prioritize important things and stay at home, which will increase business opportunities the delivery of groceries.

However, it warns that in the near future, “a potential downside risk for certain segments could be tighter regulation of food and beverages for health reasons”.

Another sector that has clearly benefited from “Stay at Home” is electronics / ICT manufacturing and sales, which were not as negatively impacted by the pandemic as originally projected and which performed reasonably well compared to other industries. .

“ICT sales have particularly benefited from the rise in teleworking and the need for many companies to update their platforms to continue operations. Most ICT companies reported stable or even growing revenues in the first half of the year and the sector’s value added is expected to increase by more than 5%, ”the report highlights.

For the chemical and pharmaceutical industries, the scenario is a little more complex, but shows equilibrium points. For example, Atradius expects the added value of chemicals to decrease moderately by around 1.5% in 2020 as many chemical companies that sell to the automotive, construction or textile sectors are and are not severely affected by the economic recession However, the sector will even out as manufacturers of articles and merchandise for the food and healthcare sectors benefit from sales.

“The volatility of the peso against the dollar and lower oil derivative prices could affect the liquidity of several companies.”

It is noticeable that more than 80% of chemical companies in Mexico are small or medium-sized and the main financial instruments in the industry are supply chains. There has been a slight increase in late payments in recent months, and due to the tight liquidity, more late payments are expected in the coming months, although the increase should not be very high.

Pharmaceutical companies tend to be financially resilient and well-established and are expected to face increased drug demand in the second half of 2020. However, problems could arise in the supply chain for imported medicines, he concludes.