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From defence contractors to healthcare companies, tech and the auto sector, a variety of corporate sectors are exposed to the U.S. administration’s efforts to slash government bureaucracy and cut spending, says Fitch Ratings.

In a new report, the rating agency details the results of its study to examine the potential credit implications for many U.S. corporations from the mandate to cut federal government operations — including the efforts of the newly-established Department of Government Efficiency (DOGE), which is seeking significant workforce cuts throughout the government.

While corporations generally operate independently from government, Fitch said that between 10% and 20% of the corporate issuers that it rates rely “significantly” on U.S. government spending and programs.

For one, certain companies “generate meaningful revenues from the federal government,” it said — while others have “close operational ties with government agencies” and may be affected by disruptions at those agencies.

In particular, the aerospace and defence sector has the largest revenue exposure to the U.S. federal government, Fitch said.

For instance, defence contractors, such as Lockheed Martin, generate most of their revenues from the government; and, aerospace manufacturers, such as Boeing, generate some revenues from the government and rely on federal regulators for new aircraft safety certifications.

The federal government is also a major revenue source for certain companies in the healthcare sector, as a buyer of drugs, medical devices and diagnostics, the report said. It also depends on government regulators for new product approvals.

In this sector, regulatory delays “could hurt earnings,” Fitch noted, as existing patents expire over the next couple of years. A “significant reduction to Medicaid funding would be a material credit negative for healthcare providers,” the report said.

Additionally, companies in a range of other sectors — including satellite companies, certain software providers and some real estate firms — are also heavily reliant on the U.S. government, it said.

Finally, disruptions in government funding from the Department of Energy and the proposed repeal of the CHIPS and Science Act, which aims to support the creation of domestic chip manufacturing capacity, “could undermine the investment plans for the utilities, renewable energy, semiconductor, and auto industries,” Fitch noted.