European Foundry Industry Sentiment

August 2024:

European Foundry Industry Sen­ti­ment, August 2024: FISI Sees a Slight Decline in August

In August 2024, the European Foundry Industry Sen­ti­ment Indic­ator (FISI) exper­i­enced a slight decline, fall­ing to 94.8 index points. This rep­res­ents a decrease of 0.7 points com­pared to the pre­vi­ous month, where the index stood at 95.5.

This decrease can be partly attrib­uted to the ongo­ing com­plex mac­roe­co­nomic situ­ation across Europe. Des­pite some improve­ment in energy prices and raw mater­ial costs, both of which are no longer at their peaks, the over­all eco­nomic out­look remains some­what stag­nant. Many eco­nom­ies across Europe con­tinue to move side­ways rather than demon­strat­ing sig­ni­fic­ant upward momentum, lead­ing to a notice­able lack of new orders. Adding to this uncer­tainty is the upcom­ing U.S. pres­id­en­tial elec­tion in 2024, which is caus­ing many cus­tom­ers to delay decisions until the out­come is clear. This is par­tic­u­larly rel­ev­ant for indus­tries with global sup­ply chains, as the poten­tial policy shifts could have far-reach­ing implic­a­tions. Sim­il­arly, the form­a­tion of the new EU Com­mis­sion is also cre­at­ing a wait-and see atti­tude among cus­tom­ers, as busi­nesses remain cau­tious about future reg­u­lat­ory changes within the European market.

Des­pite this down­turn, there is a mod­est sense of optim­ism in the out­look. The cur­rent mar­ket con­di­tions, how­ever, high­light the ongo­ing chal­lenges that the foundry industry in Europe must con­tend with.

Mean­while, the Busi­ness Cli­mate Indic­ator (BCI) con­tin­ued its down­ward trend in August, slip­ping from ‑0.61 to ‑0.62 index points. This slight decline under­scores the ongo­ing dif­fi­culties in the busi­ness envir­on­ment, as the BCI remains sig­ni­fic­antly below the neut­ral threshold of 0 index points. The drop in the BCI for August can be linked to vari­ous factors. Firstly, busi­nesses are express­ing a more sub­dued out­look on order book levels, indic­at­ing weak­en­ing demand pro­spects within the industry. This decline in orders raises con­cerns over pro­duc­tion capa­city in the com­ing months. Addi­tion­ally, the typ­ical sum­mer lull in eco­nomic activ­ity has fur­ther com­poun­ded the slow­down. Lastly, ongo­ing uncer­tainty about the com­pos­i­tion and policies of the upcom­ing EU Com­mis­sion has led to increased cau­tion among busi­nesses, con­trib­ut­ing to the over­all sub­dued sen­ti­ment. Taken together, these ele­ments paint a more cau­tious pic­ture of the busi­ness cli­mate, with com­pan­ies remain­ing hes­it­ant about both short-term and long-term eco­nomic prospects.

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