European Foundry Industry Sentiment

Septem­ber 2022: Sig­ni­fic­ant down­turn as predicted

The European Foundry Industry Sen­ti­ment Indic­ator (FISI) decreased by 2.6 points in Septem­ber and reaches a value of 104.0 points. This marks the low­est index value in the last 21 months, while it is the sharpest month to month decline since March 2020. Both the expect­a­tions for the next six months and the assess­ment of the cur­rent busi­ness situ­ation dropped sig­ni­fic­antly. The excep­tion­ally strong drop is also char­ac­ter­ised by the fact that the rat­ings point in the same dir­ec­tion across all metals.

While European lead­ers con­tinue to dis­agree on meas­ures to sup­port industry and the future of energy pro­cure­ment, an act of sab­ot­age happened on the Nord Stream pipeline. Although the incid­ent at the end of Septem­ber does not affect energy sup­ply at the moment, as sup­ply from Rus­sia had already been cut off before, it nev­er­the­less reveals the vul­ner­ab­il­ity of crit­ical infra­struc­ture in Europe. How­ever, this has had no impact on the assess­ment of the busi­ness cli­mate, nor has the latest escal­a­tion in the war in Ukraine in September.

While high order stocks con­tinue to sup­port European foundries, more and more com­pan­ies are con­fron­ted with the massive increases in energy costs. Although mar­kets are now eas­ing from the sig­ni­fic­ant price spikes, the level is still well above the pre­vi­ous years. Policy makers would do well not to use the sum­mer’s record prices as a bench­mark if they want to avoid bleed­ing the European industry dry.

Mean­while the Busi­ness Cli­mate Indic­ator (BCI) decreased in Septem­ber. The decrease of 0.02 points brings the index to 0.81 points. A neg­at­ive pro­duc­tion trend in recent weeks and fur­ther increases of sales prices bal­ance each other out.

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