European Foundry Industry Sentiment

April 2022: Effects of the war reach European foundries

The European Foundry Industry Sen­ti­ment Indic­ator (FISI) decreases by 2.7 points in April and reaches a value of 105.5 points. This marks the highest monthly loss since the out­break of corona pan­demic in Europe in March 2020.

After the decline in the pre­vi­ous month was mainly caused by a war-related drop in busi­ness expect­a­tions for the upcom­ing six months, European foundries are now increas­ingly report­ing an impact on the cur­rent busi­ness situation.

While the sanc­tions against Rus­sia were stead­ily tightened in March and April, the prob­lems in the sup­ply chains and the adjust­ments in the prices for input mater­i­als are becom­ing more and more appar­ent. In addi­tion to the war, global dis­rup­tions in the logist­ics industry have also increased due to the harsh Corona lock­down in China.

On the demand side, April has con­tin­ued to be char­ac­ter­ised by uncer­tain­ties in European vehicle man­u­fac­tur­ing. In par­tic­u­lar, the sup­ply of cable har­nesses from Ukraine caused some vehicle OEMs to stop pro­duc­tion and led to post­poned and can­celled call-offs at sup­ply­ing foundries. Mean­while, the mech­an­ical engin­eer­ing sec­tor con­tin­ues to be char­ac­ter­ised by a his­tor­ic­ally good order situ­ation. Serving these orders is nev­er­the­less a chal­lenge for many foundries given the dif­fi­culties in pro­duc­tion planning.

Mean­while the Busi­ness Cli­mate Indic­ator (BCI) increased in April. The notice­able increase of 0.30 points brings the index to 1.98 points. This marks the highest ever recor­ded level since the begin­ning of the cal­cu­la­tion in 1985. The driv­ing force behind this upswing is the rapid increase in sales price expectations.

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