European Foundry Industry Sentiment

Octo­ber 2024: 

European Foundry Industry Sen­ti­ment, Octo­ber 2024: FISI reflects intens­i­fied mar­ket challenges

In Octo­ber 2024, the European Foundry Industry Sen­ti­ment Indic­ator (FISI) exper­i­enced a sig­ni­fic­ant drop, fall­ing to 90.0 index points from 93.8 in Septem­ber. This decline marks one of the sharpest monthly down­turns of the year, under­scor­ing the worsen­ing chal­lenges faced by the foundry sector.

This down­ward trend high­lights deteri­or­at­ing con­di­tions within the foundry sec­tor, espe­cially in cru­cial cli­ent indus­tries like con­struc­tion and auto­mot­ive. High interest rates, rising pro­duc­tion
costs, and reduced demand con­tinue to weigh heav­ily on foundry oper­a­tions. The con­struc­tion sec­tor, a sig­ni­fic­ant con­sumer of cast products, remains in a pro­longed down­turn, curb­ing orders for struc­tural com­pon­ents. Mean­while, the auto­mot­ive industry has shown signs of slow­ing, redu­cing demand for spe­cial­ized cast­ings needed for vehicle man­u­fac­tur­ing. Geo­pol­it­ical ten­sions, includ­ing the ongo­ing Rus­sia-Ukraine con­flict, have fur­ther dis­rup­ted sup­ply chains and added to mar­ket instabil­ity. While energy prices have slightly mod­er­ated com­pared to their peak, elev­ated grid costs and infla­tion­ary pres­sures per­sist, exacer­bat­ing oper­a­tional chal­lenges for foundries.

At the same time, volat­ile raw mater­ial mar­kets and fluc­tu­at­ing scrap prices com­plic­ate pro­duc­tion plan­ning and cost man­age­ment. Des­pite these pres­sures, there are areas of cau­tious optim­ism. Invest­ments in infra­struc­ture pro­jects and renew­able energy are driv­ing loc­al­ized demand for foundry products, par­tic­u­larly those sup­port­ing green trans­itions. Non­ethe­less, over­all sen­ti­ment in the sec­tor remains sub­dued, with many foundries anti­cip­at­ing con­tin­ued volat­il­ity and uncer­tainty into 2025.

The Busi­ness Cli­mate Indic­ator (BCI) in Octo­ber con­tin­ued its down­ward tra­ject­ory, drop­ping from ‑0.73 to ‑0.96. This decline reflects deep­en­ing chal­lenges across Europe’s indus­trial land­scape, marked by weak demand in crit­ical sec­tors such as auto­mot­ive, con­struc­tion, and machinery. Man­u­fac­tur­ers are increas­ingly cau­tious, nav­ig­at­ing slug­gish global demand coupled with elev­ated pro­duc­tion costs.

Europe’s eco­nomic growth remains under pres­sure, fur­ther strained by China’s pro­longed eco­nomic dif­fi­culties, which have lim­ited export opportunities—a cru­cial rev­enue stream for many European man­u­fac­tur­ers. Infla­tion in the euro­zone, while gradu­ally slow­ing, con­tin­ues to under­mine both con­sumer spend­ing and indus­trial con­fid­ence, exacer­bat­ing uncer­tainty within the market.

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