European Foundry Industry Sentiment

Septem­ber 2023: European foundry industry sees fur­ther decline in FISI

The European Foundry Industry Sen­ti­ment Indic­ator (FISI) has recor­ded again a decline, rein­for­cing the neg­at­ive trend observed in August. With a decrease of 3.1 index points, the index now stands at 92.9, down from 96.0 last month.

The foundry industry is con­tend­ing with a mul­ti­tude of chal­lenges, each con­trib­ut­ing to the observed decline. Primar­ily, a not­able reduc­tion in over­all pro­duc­tion levels has been evid­ent in recent months. Moreover, the scrap index, though show­ing a slight decrease in recent months, is still main­tain­ing an elev­ated level. Many foundries are greatly con­cerned about the uncer­tainty sur­round­ing the pri­cing and avail­ab­il­ity of raw mater­i­als and scrap in the com­ing months and years.

Fur­ther­more, the pos­sible effects of reg­u­lat­ory meas­ures like the Car­bon Bor­der Adjust­ment Mech­an­ism (CBAM) are not clear yet, adding to the wor­ries of the industry. These com­bined factors col­lect­ively under­score the exist­ing pres­sures on the foundry sector.

Mean­while the Busi­ness Cli­mate Indic­ator (BCI) stands at ‑0.36 index points in Septem­ber. This marks the third con­sec­ut­ive time that the BCI is below the crit­ical threshold of 0 index points. Even though the index improved as little as 0.05 index points from last month the situ­ation is still very tense and, in some parts, pess­im­istic. The pre­vail­ing con­di­tions echo those exper­i­enced in August 2023, with an evid­ent feel­ing of uncer­tainty in the air. 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