European Foundry Industry Sentiment

Octo­ber 2022: Tem­per­at­ures and the eco­nomy are cool­ing down

The European Foundry Industry Sen­ti­ment Indic­ator (FISI) decreased by 1.2 points in Octo­ber and reaches a value of 102.8 points. Again, the over­all expect­a­tions for the next six months and the assess­ment of the cur­rent busi­ness situ­ation dropped. A closer look reveals that iron foundries report a sig­ni­fic­ant decrease in the cur­rent busi­ness situ­ation for the second time in a row, while the expect­a­tions for the next six months show no change com­pared to the pre­vi­ous month at a low base. The situ­ation is dif­fer­ent for non-fer­rous foundries. Here, the assess­ment of the situ­ation remains at the weak level of the pre­vi­ous month, while expect­a­tions con­tinue to decline.

Look­ing ahead to the year 2023, there are stronger signs of a reces­sion in sev­eral European eco­nom­ies. In its Octo­ber fore­cast, the IMF pre­dicts neg­at­ive GDP growth rates for Ger­many (-0.3%) and Italy (-0.2%). And for other large eco­nom­ies, the adjust­ments to the fore­casts for the com­ing year com­pared to the April fore­cast are in part ser­i­ous. Although the fore­casts for North Amer­ica and Asia were also revised down­wards, neither the expec­ted GDP growth rates (USA 1.0%; China 4.4%) nor the fore­cast revi­sions com­pared to the last fore­cast reach the European level. It remains unclear how strongly demand for cast com­pon­ents will decline. While order books are still at a good level in many mar­kets, incom­ing orders are already declin­ing notice­ably at the onset of winter.

Mean­while the Busi­ness Cli­mate Indic­ator (BCI) decreased in Octo­ber. The decrease of 0.06 points brings the index to 0.76 points. An increased assess­ment of stocks of fin­ished products   and decreas­ing expect­a­tions 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