European Foundry Industry Sentiment

Janu­ary 2022: European foundries are start­ing the new year with confidences

The European Foundry Industry Sen­ti­ment Indic­ator (FISI) increases by a solid 1.31 points at the start of 2022 and reaches a value of 109.4 points. This marks the greatest month-on-month improve­ment since April 2021. The European foundries have left the poor second half of the pre­vi­ous year behind for the time being thanks to the dynamic and pos­it­ive trend of the last two months. It is an encour­aging devel­op­ment that iron, steel and non-fer­rous metal foundries all assessed the cur­rent situ­ation and expect­a­tions for the upcom­ing six months more pos­it­ively in Janu­ary than in the pre­vi­ous month. How­ever, there are dif­fer­ences in the degree to which they eval­u­ate both. While the assess­ment of the cur­rent busi­ness situ­ation has improved mod­er­ately over­all, the FISI is mainly driven by more optim­istic expectations.

Since the health sys­tems are not exper­i­en­cing over­load des­pite the num­bers of corona infec­tions that exploded in Janu­ary in most parts of Europe, the signs are set for nor­m­al­isa­tion. The eco­nomy is there­fore expect­ing fewer staff absences and sup­ply chains return­ing to normal.

For now, this news mat­ters more than the still high energy prices. Signs of de-escal­a­tion in the con­flict between Ukraine and Rus­sia would also be import­ant for the European industry in this respect. Accord­ingly, an escal­a­tion of the situ­ation would have a sig­ni­fic­ant impact on the eco­nomy given the energy depend­ency and the dir­ect European neighbourhood.

At the same time, the Busi­ness Cli­mate Indic­ator (BCI) remains on a high level in Janu­ary. The slight increase of 0.03 points brings the index to 1.81 points. Main drivers are the export order-book levels and the assess­ment of stocks of fin­ished products.

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.

CAEF Con­tact:

Till­man van de Sand
Sec­ret­ary Com­mis­sion for Eco­nom­ics & Stat­ist­ics
phone: +49 211 68 71 — 301
mail: tillman.vandesand@caef.eu