European Foundry Industry Sentiment

July 2023: Hope on the Hori­zon: FISI with first increase since February

The European Foundry Industry Sen­ti­ment Indic­ator (FISI) records its first increase since Feb­ru­ary this year. Rat­ing of 0.7 index points higher than in June, the index reaches a value of 99.2 points in July.

The foundry industry is still grap­pling with mul­tiple chal­lenges. As in the pre­vi­ous months order back­logs are being worked off, while new orders fall short again. The ongo­ing decline in raw mater­ial prices is hav­ing a reliev­ing effect. Nev­er­the­less, this must be seen in the con­text of a fal­ter­ing global eco­nomy, which is gen­er­at­ing less and less impulses for demand. Nev­er­the­less, it’s import­ant to note that the hol­i­day sea­son could poten­tially intro­duce a bias into the reports. In the pre­ced­ing month, there was no not­able shift in polit­ical decision-mak­ing or the gen­eral indus­trial land­scape. This status quo may be attrib­uted, in part, to the impact of the ongo­ing polit­ical sum­mer break. Fol­low­ing the latest devel­op­ments there is no turn­around in sight.

Mean­while the Busi­ness Cli­mate Indic­ator (BCI) decreased in July. The decrease of 0.15 points brings the index to ‑0.09 points. It is the first time since Janu­ary 2021 that the BCI falls below the threshold of 0 points and is there­fore neg­at­ive again. The decline of the BCI below 0 index points can be explained by fra­gile expect­a­tions in the industry. Both pro­duc­tion and employ­ment expect­a­tions for the month ahead have turned neg­at­ive for the first time since 2020.

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:

Johannes Kappes
Sec­ret­ary Com­mis­sion for Eco­nom­ics & Stat­ist­ics
phone: +49 211 68 71 — 291
mail: johannes.kappes@caef.eu