European Foundry Industry Sentiment

August 2022: Last breath before the down­hill ride?

The European Foundry Industry Sen­ti­ment Indic­ator (FISI) increased by 0.8 points in August and reaches a value of 106.6 points. Both the expect­a­tions for the next six months and the assess­ment of the cur­rent busi­ness situ­ation are still robust in the sum­mer month. How­ever, it should be said in advance that hol­i­day sea­son might have a bias­ing effect on the reports.

Mean­while, the eco­nomic situ­ation does not prom­ise any eas­ing. Although the Ukrain­ian mil­it­ary was able to achieve remark­able suc­cesses in August, which ini­tially had a pos­it­ive effect on energy prices, it is already becom­ing appar­ent in Septem­ber that the war in Ukraine will reach a new dan­ger­ous level of escal­a­tion after the fake ref­er­en­dums and the par­tial mobil­isa­tion of Rus­sia. For the form­a­tion of the pro­cure­ment costs of European foundries, such reports are cer­tainly sig­ni­fic­ant, since not only but above all the pri­cing of energy now has more to do with spec­u­la­tion than with the real eco­nomy at the moment. The suc­cesses in energy sav­ing that have been recor­ded through­out Europe in recent weeks are mainly linked to the efforts of the industry. Unfor­tu­nately, this is also due to a reduc­tion in pro­duc­tion, which is affect­ing the foundries as well. It remains to be seen what effect the start of the heat­ing period will have in the com­ing weeks. If the gas reserves start to drop again in the near future, the nerves could be on edge again very soon. Mean­while, more and more busi­nesses are finally being hit by energy costs, as old con­tracts expire and the num­ber of com­pan­ies that have to pro­duce under the new con­di­tions is stead­ily increasing.

Mean­while the Busi­ness Cli­mate Indic­ator (BCI) decreased in August. The decrease of 0.28 points brings the index to 0.83 points. Declin­ing new orders and a neg­at­ive pro­duc­tion trend in recent weeks are sig­ni­fic­antly dark­en­ing the busi­ness climate.

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