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Despite the tighter financial conditions and gloomy economic outlook, revenues and margins at North American companies are expected to hold up through next year, Fitch Ratings says.

In a new report, the rating agency said it expects overall revenue growth and margins for non-financial corporate issuers to remain resilient through 2024 in the face of elevated interest rates, weaker economic growth and the persistent risk of a recession in the U.S.

Last month, Fitch lowered its forecast for U.S. GDP growth in 2024 to 0.5% from 0.8%, and is expecting the prevailing rate environment to eventually tip the U.S. economy into recession later this year.

“The full effect of monetary tightening on jobs and spending is taking longer to unfold, but we expect Fed tightening to push the U.S. economy into a mild recession in [the fourth quarter of 2023] and rates to stay higher for longer as still high core inflation precludes rate cuts until March 2024,” it said.

Against that backdrop however, the rating agency is forecasting aggregate revenue growth of 2% in 2024, following an expected 0.4% decline in aggregate revenue this year.

Revenues are also projected to rise in 17 out of 22 corporate sectors, “with growth for most [sectors] expected to exceed that of 2023,” it noted.

Additionally, Fitch said that aggregate margins are also forecast to grow 50 by basis points to 18.3% by the end of 2024.