European Foundry Industry Sentiment

Septem­ber 2024: 

European Foundry Industry Sen­ti­ment, Septem­ber 2024: FISI Exper­i­ences Con­tin­ued Decline in September

In Septem­ber 2024, the European Foundry Industry Sen­ti­ment Indic­ator (FISI) saw a fur­ther decrease, slip­ping to 93.8 index points. This rep­res­ents a drop of 1.0 points com­pared to the pre­vi­ous month’s read­ing of 94.8, con­tinu­ing the gradual down­ward trend observed in recent months.

This down­turn reflects a com­bin­a­tion of broader mac­roe­co­nomic pres­sures within Europe and ongo­ing sec­tor-spe­cific chal­lenges. A not­able factor affect­ing foundry sen­ti­ment is the recent decrease in raw mater­ial prices, includ­ing scrap metal, which while bene­fi­cial for cost reduc­tion, has been over­shad­owed by weak demand across mul­tiple indus­tries. Par­tic­u­larly impacted is the con­struc­tion sec­tor, one of the most sig­ni­fic­ant con­sumers of foundry products, which con­tin­ues to face a pro­longed down­turn as elev­ated interest rates and tighter budgets con­strain new investments.

Con­cerns over the shift­ing eco­nomic land­scape are prompt­ing increased cau­tion across the foundry sec­tor. Anti­cip­ated changes within the EU Com­mis­sion and the forth­com­ing U.S. pres­id­en­tial elec­tion have left busi­nesses and cli­ents alike inclined to delay long-term com­mit­ments until there is greater clar­ity around pos­sible policy changes. Steel and iron foundries, which rely on stable demand from indus­tries like auto­mot­ive and machinery, are feel­ing these effects most acutely. Mean­while, non-fer­rous foundries, bene­fit­ing from more con­sist­ent demand across var­ied applic­a­tions, are some­what more stable but still affected by a gen­eral mar­ket hesitancy.

While there are glim­mers of optim­ism for gradual recov­ery, the European foundry industry remains under the influ­ence of both global and regional eco­nomic pres­sures, and many com­pan­ies expect ongo­ing mar­ket fluc­tu­ations as 2025 unfolds.

The Busi­ness Cli­mate Indic­ator (BCI) in Septem­ber saw a marked decline from ‑0.62 to ‑0.73, reflect­ing escal­at­ing chal­lenges within Europe’s indus­trial sec­tor. This sig­ni­fic­ant drop mir­rors a com­bin­a­tion of per­sist­ent obstacles: not­ably low demand across key indus­tries, such as auto­mot­ive and machinery, and a cau­tious approach among man­u­fac­tur­ers facing both slug­gish global demand and high pro­duc­tion costs. Europe’s slow eco­nomic growth, partly due to Chin­a’s weakened post-pan­demic recov­ery, has exacer­bated the lack of export demand, which remains cru­cial for many European manufacturers.

Fur­ther­more, infla­tion in the euro­zone, while slow­ing, is still impact­ing con­sumer and indus­trial con­fid­ence. Sup­ply chain adjust­ments, along­side broader struc­tural con­cerns like the green trans­ition and rising labour costs, con­tinue to weigh heav­ily on sen­ti­ment. Con­sequently, many com­pan­ies remain hes­it­ant to increase pro­duc­tion or invest­ment, await­ing clearer signs of eco­nomic sta­bil­ity and policy dir­ec­tions from the upcom­ing EU Commission

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