European Foundry Industry Sentiment

July 2022: Gap between sen­ti­ment of situ­ation assess­ment and expect­a­tions has never been greater

The European Foundry Industry Sen­ti­ment Indic­ator (FISI) decreased by 0.6 points in July and reaches a value of 105.8 points. It con­tin­ues to be the case that two dif­fer­ent trends are appar­ent in the com­pos­i­tion of the FISI. While the cur­rent situ­ation is still con­sidered pos­it­ive by many foundries due to the very good order situ­ation in the mech­an­ical engin­eer­ing sec­tor, the expect­a­tions for the next six months are on the down­turn. There has never been a greater dif­fer­ence between the assess­ment of the situ­ation and the expect­a­tions since the begin­ning of the data col­lec­tion. Ten­sions are rising, espe­cially as signs of a slow­down in demand are intensifying.

It should be noted that the non-fer­rous metal foundries have even sup­por­ted the FISI recently, as improve­ments in the sup­ply of semi­con­duct­ors in the weighty auto­mot­ive industry are gradu­ally becom­ing notice­able. How­ever, these are stat­ist­ical base effects, as the base level is excep­tion­ally low after the past two years of crisis.

The very high level of infla­tion has forced cent­ral banks in North Amer­ica and Europe to act. In addi­tion, Chin­a’s eco­nomy is weak­en­ing due to prob­lems in the con­struc­tion sec­tor. Rising interest rates and fears of reces­sion are cool­ing the busi­ness out­look significantly.

Mean­while the Busi­ness Cli­mate Indic­ator (BCI) decreased in July. The increase of 0.31 points brings the index to 1.14 points. The con­sid­er­able price increases of the past months affect demand more and more. New orders, recently, have been markedly declin­ing. Although price expect­a­tions are still high, the peak in April has been seen off due to decreas­ing demand.

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:

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