European Foundry Industry Sentiment

August 2023: Industry faces Head­winds as Index declines in August

The European Foundry Industry Sen­ti­ment Indic­ator (FISI) has recor­ded a decline, mark­ing a shift from the pos­it­ive trend observed in July. With a decrease of 3.2 index points, the index now stands at 96.0, down from 99.2 last month.

Cur­rently, a key chal­lenge facing the European Foundry Industry is the short­age of new orders. With back­logs nearly cleared, new orders in vari­ous cat­egor­ies are needed. Des­pite the cur­rent rel­at­ive sta­bil­ity in raw mater­i­als and scrap prices, the European Foundry Industry appears to be encoun­ter­ing light signs of weak­en­ing. Fol­low­ing the latest devel­op­ments there is no turn­around in sight. High infla­tion rates and rising interest rates are put­ting a brake on new invest­ments. Addi­tion­ally, many foundry pro­fes­sion­als express con­cerns about the future, given the avail­ab­il­ity and pri­cing of raw mater­i­als and scrap.

The European Foundry Industry, facing these chal­lenges, is com­mit­ted to deploy­ing adapt­ab­il­ity and stra­tegic plan­ning to nav­ig­ate through this chal­len­ging land­scape. Nev­er­the­less, it is import­ant to note that the hol­i­day sea­son could poten­tially intro­duce a bias into the reports.

Mean­while the Busi­ness Cli­mate Indic­ator (BCI) decreased in August as well. The decrease of 0.24 points brings the index to ‑0.33 points. This marks the second con­sec­ut­ive time that the BCI has fallen below the threshold of 0 points. It rep­res­ents the low­est value since Novem­ber 2020. The neg­at­ive BCI can be attrib­uted, in part, to a less favour­able assess­ment of order book levels. Addi­tion­ally, the observed trend in pro­duc­tion over the past few months had a neg­at­ive impact.

The FISI – European Foundry Industry Sen­ti­ment Indic­ator – is the earli­est avail­able com­pos­ite indic­ator provid­ing inform­a­tion on the European foundry industry per­form­ance. It is pub­lished by CAEF the European Foundry Asso­ci­ation every month and is based on sur­vey responses of the European foundry industry. The CAEF mem­bers are asked to give their assess­ment of the cur­rent busi­ness situ­ation in the foundry sec­tor and their expect­a­tions for the next six months.

The BCI – Busi­ness Cli­mate Indic­ator – is an indic­ator pub­lished by the European Com­mis­sion. The BCI eval­u­ates devel­op­ment con­di­tions of the man­u­fac­tur­ing sec­tor in the euro area every month and uses five bal­ances of opin­ion from industry sur­vey: pro­duc­tion trends, order books, export order books, stocks and pro­duc­tion expectations.

CAEF Con­tact:

Johannes Kappes
Sec­ret­ary Com­mis­sion for Eco­nom­ics & Stat­ist­ics
phone: +49 211 68 71 — 291
mail: johannes.kappes@caef.eu