European Foundry Industry Sentiment

June 2024:

European Foundry Industry Sen­ti­ment, June 2024: FISI con­tin­ues with side­ways trend in June.

In June 2024, the European Foundry Industry Sen­ti­ment Indic­ator (FISI) exper­i­enced a slight decrease to 94.5 index points. This devel­op­ment reflects the third con­sec­ut­ive decrease for the FISI, with the index exper­i­en­cing a down­ward move­ment of 0.2 points, set­tling at 94.5 com­pared to 94.7 in the pre­vi­ous month. In the cur­rent month, the FISI has demon­strated stead­i­ness, exhib­it­ing min­imal fluc­tu­ations. This lack of sig­ni­fic­ant move­ment can be traced back to a con­flu­ence of factors that have col­lect­ively influ­enced this out­come. The first factor to con­sider is the notice­able decel­er­a­tion in the eco­nom­ies of the lar­ger European nations. This has cre­ated a ripple effect, impact­ing vari­ous sec­tors includ­ing the per­form­ance of the FISI. Secondly, the industry is cur­rently clouded by a sub­stan­tial degree of uncer­tainty regard­ing its future. This uncer­tainty, fueled by unpre­dict­able mar­ket trends and shift­ing investor sen­ti­ments, has con­trib­uted to the static beha­viour observed in FISI. Third, it’s import­ant to high­light the role of heavy sub­sidies provided to foundries in non-European Union coun­tries. These sub­sidies have enabled these foundries to under­cut the costs of their European coun­ter­parts, cre­at­ing a chal­len­ging com­pet­it­ive land­scape. This has fur­ther added to the eco­nomic pres­sures influ­en­cing the per­form­ance of fin­an­cial instru­ments like FISI. An addi­tional factor are the recent elec­tion res­ults from the European Union. The polit­ical shifts and policy changes that often fol­low such events can cre­ate an envir­on­ment of hes­it­ancy among investors, lead­ing to less move­ment in the market.

Mean­while the Busi­ness Cli­mate Indic­ator (BCI) has exper­i­enced a slight decline,decreasing from ‑0.39 to ‑0.46 index points in June. This marks yet another month where the BCI remains entrenched below the crit­ical threshold of 0 index points, reflect­ing ongo­ing chal­lenges within the busi­ness envir­on­ment. The recent down­turn in the BCI can be attrib­uted to sev­eral key factors. Firstly, there has been a notice­able decel­er­a­tion in the pro­duc­tion trend, which had pre­vi­ously shown signs of improve­ment. This slow­down indic­ates that the ini­tial momentum in pro­duc­tion activ­it­ies has not been sus­tained. Secondly, the assess­ment of export order-book levels has not shown sig­ni­fic­ant growth, remain­ing rel­at­ively stable and reflect­ing per­sist­ent uncer­tain­ties in inter­na­tional trade dynam­ics. Lastly, expect­a­tions for selling prices in the com­ing months have also plat­eaued, sug­gest­ing that mar­ket con­di­tions are still volat­ile and unpredictable.

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