Sector Assessment
Aerospace, Defense, and Security
The ability of the Russian state to finance and develop next-generation defense platforms will be hit hard and will impact prospects in growing export markets in the Middle East.
Agribusiness
The biodiesel market is now pivotal for vegetable oils, and Russia’s war is having a significant effect here also. The presence of export taxes means that palm oil in SE Asia and soy oil in Argentina are currently priced at very competitive levels, making biodiesel produced in these origins competitive when compared with petroleum and gasoil. War in Ukraine is keeping gasoil ‘cracks’ over crude oil historically very high, making it easier for vegetable oil and grain-derived biofuels to compete with refined petroleum products.
Apparel
Significant sanctions imposed on Russia will directly impact apparel trade, particularly for native brands that rely on the country’s economy, with many already struggling after the ruble’s devaluation. Consumers in Russia will be hit hard with a sudden rise in the cost of living, and most will divert spending away from apparel purchases.
Automotive
The imposition of harsh sanctions has caused a collapse in the rouble, forcing monetary policy action and likely rapid onset of inflation. International seizure of Russian central bank assets looks likely to limit mitigating action by the bank. Consumer confidence will likely collapse, hitting car demand.
Banking, Payments, and Wealth Management
Rising energy prices will see banks promote inflation protection products, but also focus digital money management capabilities on helping consumers anticipate and mitigate economic disruptions. Small SMEs may be vulnerable to rapid price changes.
Construction
Soaring energy costs have significantly impacted construction activity since the beginning of the invasion. Supply shortages are expected to keep prices elevated in the short term, impacting the cost of energy-intensive materials such as bricks and cement, as well as crude oil derivatives such as bitumen.
Consumer
Most (90%) of global consumers are extremely/quite concerned about the impact of inflation on their household budget, while 86% are concerned about the cost of home energy bills, according to GlobalData's Q3 2022 Global Consumer Survey.
Oil and Gas
With the threat of Russia completely stopping its exports of gas to Europe, midstream and downstream companies are expected to see losses in the long run, unless actions on diversification are taken robustly.
Insurance
The industry continues to worry about the possibility of Russian cyber attacks on Ukraine extending to the West.
Medical Devices
Medical devices are not directly impacted by sanctions and most impacts will arise as a result of worsening economic conditions impacting the ability of the private sector to operate, and Russian Health Ministry financing
Healthcare
Wartime has led to an increased demand for trauma services, but the extent of this will depend on how the conflict widens and the capacity of Russian and Belarus military medical services to absorb combatant injuries.
Retail
Russian retailers are stepping in to replace the exit of major Western brands and retailers. They will benefit from the removal of these Western rivals but will face similar operational difficulties and will be negatively impacted by the economic issues affecting their customers.
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