Global economic growth has remained fairly robust in 2006, continuing to support an environment of generally improving corporate credit quality, reports Fitch Ratings.

“Global corporate finance downgrades have continued to trail upgrades in 2006 resulting in a ratio of downgrades to upgrades of 0.5 to 1 for the three-quarter period ending in September,” noted Charlotte Needham, director of Credit Market Research at Fitch, “This represents a wider margin of positive to negative rating actions than the 0.7 to 1 ratio recorded a year earlier.”

Although rating activity has been positive overall, it has also been somewhat uneven, Fitch added. Upgrades have been especially strong among global banking and finance companies, exceeding downgrades by a ratio of 4 to 1 through September, it reported.

However, industrial issuers in North America and Europe, however, have continued to see more downgrades than upgrades in 2006 — some due to performance issues and others due to the heated pace of shareholder friendly initiatives making headlines across the two regions, it explained.

“The distribution of outlooks across Fitch’s global corporate finance portfolio suggests more of the same [in the future],” said Mariarosa Verde, managing director of Credit Market Research.

The mix of positive to negative outlooks remains firmly net positive across the universe of Fitch-rated global financial institutions pointing to further rating gains for financial entities, however credit quality among Fitch-rated industrials, especially in the U.S. and Europe, is expected to continue to deteriorate.

At the end of September, 14% of U.S. industrial issuer ratings, and 13% of European industrials carried negative outlooks, while 7% and 8%, respectively, enjoyed positive outlooks.