Fitch Ratings on Monday said downgrades for the Europe, Middle East and Africa (EMEA) region were expected to outnumber upgrades this year – despite many corporate companies’ austerity measures and cautious financial strategies.

Last year, the EMEA region recorded 47 downgrades, a significant increase from the 27 downgrades recorded in 2011.

Fitch’s trailing three-month aggregate revisions to Outlooks and Rating Watches indicated that the region would not “break out” of the negative hold it entered last year.

The ratings agency cited weak performance, rather than more aggressive financial policies, merger and acquisition activity or capital expenditure, as driving the ratings.

Utilities and telecommunications companies accounted for 61% of downgrades last year and were expected to remain negative during the next year on the back of weak fundamentals and regulatory pressure across most of the European Union and a difficult mix of weaker consumer confidence and strong competitive pressure.

Fitch noted that other sectors with a negative ratings outlook included European food retailers, where changing consumption patterns challenge the region's biggest operators’ business models.

Steel producers in Western Europe were also expected to maintain a negative outlook owing to low demand from the key construction and automotive markets.