WALTHAM, MA, 13 December 2007 — Global Insight, the world's leading company for economic and financial analysis and forecasting, announced today that corporate bankruptcies in the Eurozone are expected to rise 5% in 2008, after surging 8% in 2007. The split between the goods and services industries should deepen, as the former will continue to face increasing competition in export markets, in line with a stronger euro and decelerating economic activity in key foreign client countries, such as the United States.

The industries that are expected to face the greatest deterioration in risk profiles in 2008 are in the metals, chemicals, agriculture, and construction sectors. They should be affected, in particular, by a slowdown in revenues and therefore a rising growth risk. Also, companies with a relatively high historical level of indebtedness, such as in the construction engineering, construction materials, and chemicals industries, are likely to be exposed to higher default probabilities.

Metals industries, such as basic and fabricated products, are now experiencing a turning point. Global demand remains strong, but competition has increased as China has become a net exporter of steel since 2006, and the strong euro has pressured margins from foreign sales.

Agriculture is confronted by a saturated domestic market with limited growth prospects, which has led to a fierce competition on pricing. Profitability risks, in turn, have surged, and the continued high level of energy prices should further damage margins. The export dependence of agriculture is low when compared to many other industries, but the strength of the euro is detrimental to the sale of accumulated products.

Construction is experiencing a turning point, after two years of high growth. The residential construction segment is seeing increasing risks, as high property prices and rising interest rates may discourage some home buyers. The slowing housing market should more than offset the impact of healthier business demand for construction, which is expected to remain steady, as well as strong growth in EU-funded infrastructure projects in Eastern Europe. Also, in some countries like Spain, where capital expenditures have surged in the last decade, Global Insight expects some major capacity overhang as the economic activity cools down and consumer indebtedness rises.

Chemicals sectors-excluding drugs-will logically suffer from their strong ties with the construction and agriculture industries, especially the sub-industries of basic industrial chemicals and fertilizers and pesticides. Moreover, the surge of oil prices has significantly increased input costs for chemicals production, leading to a surge in operating profitability risks. Combined with a relatively high net debt-to-sales ratio, this should add strong pressure on free cash flow and overall credit risk.

Among the sectors whose risk profiles will remain relatively stable or even improve in 2008 are energy-mining, aircraft, and several of the services industries, with the exception of finance. A resilient consumer spending growth should continue to fuel services activity such as in retail and wholesale trade. While energy-mining still faces poor volume growth prospects, the risks to profitability are mitigated by high levels of output prices; with low levels of indebtedness, the risks of default remain contained. The aircraft sector is benefiting from strong order flows and healthy demand, despite recent production delays, as the market remains relatively concentrated.

Some manufacturing industries could also show limited improvement in their risk profile in some European countries where structural reforms and/or stronger domestic demand can boost sales in specific sectors. This is the case, for instance, of the Italian clothing industry, which rebounded in 2006 and 2007 after a long period of recession. The companies that remain are more resilient, being stronger competitors internationally, and more profitable.

Global Insight's Sector Risk Ratings are produced as part of the World Industry Service and are updated quarterly. These risk ratings are designed to assist credit analysts and asset managers in identifying the best prospects for movements in sector credit quality on a comparable basis across industries and across countries. For more information and excerpts on the U.S. corporate bankruptcies forecast, please visit http://www.globalinsight.com/corpbankruptcies.

Contact:
Mark Killion, CFA, MD World Industry Service, Global Insight
+ 610 490.2547 (mark.killion@globalinsight.com)

Alain Faucher, Economist, World Industry Service, Global Insight
+44.207.452.5063 (alain.faucher@globalinsight.com)

Catarina Feria-Walsh, Media Relations, Global Insight
+44.207.452.5183 (catarina.walsh@globalinsight.com)

About Global Insight
Global Insight, Inc. (http://www.globalinsight.com/) is a privately held company that brought together the two most respected economic information companies in the world, DRI and WEFA. Global Insight provides the most comprehensive economic and financial information available on countries, regions and industries, using a unique combination of expertise, models, data and software within a common analytical framework to support planning and decision-making. Through the world's first same-day analysis and risk assessment service, Global Insight provides immediate insightful analysis of market conditions and key events around the world, covering economic, political, and operational factors. The company has over 3,800 clients in industry, finance, and government with revenues in excess of $95 million, over 675 employees and 25 offices in 14 countries covering North and South America, Europe, Africa, the Middle East, and Asia.