March 2020: First impacts of COVID-19
Before the outbreak of the coronavirus pandemic, expectations indicated an end to the industrial slowdown. But in March the European Foundry Industry Sentiment Indicator decreased. The assessment of the current business situation of the European foundries declined and expectations for the following six months dropped. This was in line with the decrease of the Business Climate Indicator for the Euro Area, reflecting managers´ descending production expectations.
This shows that the European Foundry Industry is feeling the consequences of the corona pandemic. National governments and the EU have taken a variety of steps in an attempt to contain the rapid spread of the COVID-19 virus. Therefore, European foundries are facing business travel restrictions and supply shortage, introduced short-time work or have been even forced to stop production completely. In particular, foundries supplying the automotive industry face postponements of orders. How severe will be the external shock? This will ultimately depend on when the economy finds its way back to normality.
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 the European Foundry Association (CAEF) 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.
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