The spread of the coronavirus will negatively impact around 16% of North American companies under its baseline economic scenario, but under its downside scenario, that figure will jump to about 45%, Moody’s Investors Service says in a report published today.

The credit ratings agency’s baseline scenario assumes a normalisation of economic activity in the second half of 2020 while its downside scenario sees the number of COVID-19 cases surge and fear that the virus won’t be quickly contained, leading to extensive travel restrictions and quarantines, as well as a protracted slump in commodity prices.

“Our forecasts remain highly uncertain at this point,” Moody’s said in a statement.

“Under our baseline scenario, waning travel and tourism and reduced discretionary spending would hurt mainly passenger airlines, auto suppliers and apparel, gaming, lodging and leisure, and transportation companies,” said Benjamin Nelson, a Moody’s VP and senior credit officer and a co-author of the report.

“However, recession risks are rising as coronavirus spreads around the world.”

The baseline scenario assumes coronavirus infections rise through to the end of the second quarter, leading to travel restrictions, quarantines, and closures of schools, factories, and businesses in the most affected countries. Monetary and fiscal measures will help support the global economy later in 2020.

Under the downside scenario, monetary and fiscal stimulus won’t be sufficient to buoy the global economy, and certain key economies would fall into recession leaving sectors such as oil & gas, manufacturing and chemicals vulnerable to extensive and prolonged travel restrictions, quarantines and multiregional closures of schools, factories and businesses.

Market access likely would become “choppy”, making it more difficult for companies to address urgent liquidity needs and upcoming debt maturities..

The rating agency’s heatmap of sector exposure shows that liquidity could be a significant concern for aerospace, apparel, consumer nondurables and mining companies.

Meanwhile, some sectors will be largely resilient to coronavirus-related issues under either of Moody’s scenarios.

These include food & beverage, packaging, telecommunications, and waste management, all of which provide essential goods and services.

Grocery stores, for example, have remained open even in heavily-restricted containment zones in Italy, China, and the US.