Our outlook for U.S. personal care, consumer services, apparel, and tobacco companies continues to be slightly negative for the remainder of 2012 and into 2013. This incorporates our base-case forecast for continued slow growth in the key U.S. macroeconomic factors that influence the consumer products sector, including consumer confidence and spending. This, together with worsening economic conditions in Europe and continued deceleration in emerging market growth, will moderate the global demand for consumer products, we believe.
Though we expect economic growth to pick up, we believe the U.S. recovery will remain modest and sluggish. Our credit outlook for these sectors is slightly negative.
Also, we believe participants will face headwinds from foreign currency translation and still-high costs of some commodities (such as fuel and oil based resins), though some will begin to benefit from lower commodity costs (such as cotton and natural gas) during the second half of 2012.