European Foundry Industry Sentiment

July 2024:

European Foundry Industry Sen­ti­ment, July 2024: FISI Exper­i­ences Slight Uptick in July

In July 2024, the European Foundry Industry Sen­ti­ment Indic­ator (FISI) saw a slight upward move­ment, rising to 95.5 index points. This rep­res­ents an increase of 1.0 point com­pared to the pre­vi­ous month, where the index stood at 94.5. This mod­est improve­ment in the FISI can be attrib­uted to a com­bin­a­tion of factors cur­rently influ­en­cing the European eco­nomy. Firstly, there has been a slight relief and a more optim­istic out­look in the broader European eco­nomic land­scape. Recent indic­at­ors sug­gest that while chal­lenges remain, there is a grow­ing sense of sta­bil­ity that has pos­it­ively impacted sev­eral indus­trial sec­tors, includ­ing the foundry industry. Secondly, the sum­mer break has res­ul­ted in a reduced volume of data, which can occa­sion­ally lead to less pre­cise meas­ure­ments in the index. How­ever, the gen­eral trend remains pos­it­ive des­pite this sea­sonal vari­ab­il­ity. Finally, the auto­mot­ive sec­tor has shown signs of recov­ery, provid­ing a much-needed boost to the foundry industry. The renewed demand for auto­mot­ive com­pon­ents has con­trib­uted to the over­all improve­ment in the FISI, reflect­ing the sec­tor’s import­ance as a key driver of foundry out­put in Europe.

While this increase is a wel­come devel­op­ment, it is essen­tial to approach the num­bers with cau­tion. The broader eco­nomic envir­on­ment remains com­plex, and the foundry industry con­tin­ues to face sig­ni­fic­ant chal­lenges. Non­ethe­less, the pos­it­ive influ­ences of eco­nomic optim­ism, sea­sonal factors, and sec­tor-spe­cific resi­li­ence have col­lect­ively con­trib­uted to this slight improve­ment in the FISI for July.

Mean­while, the Busi­ness Cli­mate Indic­ator (BCI) has exper­i­enced a fur­ther decline, decreas­ing from ‑0.46 to ‑0.61 index points in July. This con­tin­ued drop high­lights the per­sist­ent chal­lenges within the busi­ness envir­on­ment, as the BCI remains firmly below the crit­ical threshold of 0 index points. The down­turn in the BCI for July can be attrib­uted to sev­eral factors. Firstly, there has been a more neg­at­ive assess­ment of order book levels, reflect­ing a weaker demand out­look within the industry. This decline in orders sug­gests grow­ing con­cerns about future pro­duc­tion capa­city and demand. Secondly, the typ­ical slow­down dur­ing the sum­mer break has fur­ther dampened eco­nomic activ­ity, con­trib­ut­ing to the over­all decline. Lastly, uncer­tainty sur­round­ing the upcom­ing EU Com­mis­sion, and the poten­tial policy changes it may bring has caused hes­it­ancy among busi­nesses, exacer­bat­ing the already cau­tious mar­ket sen­ti­ment. These factors com­bined have res­ul­ted in a more pess­im­istic busi­ness cli­mate, as com­pan­ies remain wary of both imme­di­ate and future eco­nomic conditions.

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