European Foundry Industry Sentiment

Novem­ber 2024: 

European Foundry Industry Sen­ti­ment, Novem­ber 2024: FISI reflects per­sist­ent chal­lenges amid global instability

In Novem­ber 2024, the European Foundry Industry Sen­ti­ment Indic­ator (FISI) edged down slightly, mov­ing from 90.0 in Novem­ber to 89.6. This decline under­scores the ongo­ing chal­lenges within the foundry sec­tor, exacer­bated by eco­nomic and geo­pol­it­ical tur­bu­lence. Mean­while, the Busi­ness Cli­mate Indic­ator (BCI) dis­played a mod­est improve­ment, rising from ‑0.93 to ‑0.77, indic­at­ing cau­tious optim­ism in broader indus­trial expect­a­tions. Key cli­ent indus­tries such as con­struc­tion and auto­mot­ive remain under strain. The con­struc­tion sec­tor con­tin­ues to grapple with high interest rates, lim­it­ing invest­ment in infra­struc­ture pro­jects and redu­cing orders for cast com­pon­ents. The auto­mot­ive industry, still adapt­ing to the trans­ition towards elec­tric vehicles, faces slug­gish demand for spe­cial­ized cast­ings, fur­ther dampen­ing pro­duc­tion out­looks. Adding to these chal­lenges is the elec­tion of Don­ald Trump as U.S. pres­id­ent-elect, a devel­op­ment that has intro­duced new uncer­tain­ties­into the global eco­nomic land­scape. Trump’s policies, which his­tor­ic­ally emphas­ized pro­tec­tion­ism and aggress­ive trade meas­ures, have raised con­cerns over poten­tial new tar­iffs, trade dis­rup­tions, and sup­ply chain realign­ments. For European man­u­fac­tur­ers, this could trans­late into higher costs and restric­ted mar­ket access, par­tic­u­larly if his admin­is­tra­tion fol­lows through on pro­posed tar­iffs tar­get­ing Chinese and European goods.

The ongo­ing Rus­sia-Ukraine con­flict con­tin­ues to pose chal­lenges for global trade and sup­ply chains, but its impacts have evolved. Tra­di­tional sup­ply routes remain dis­rup­ted, par­tic­u­larly in the Black Sea region, com­plic­at­ing logist­ics for energy and agri­cul­tural com­mod­it­ies. How­ever, busi­nesses have increas­ingly adap­ted through region­al­iz­ing sup­ply chains and secur­ing altern­at­ive sources. Des­pite these adjust­ments, energy costs and infla­tion­ary pres­sures per­sist, influ­enced by sanc­tions and mar­ket volat­il­ity. The war has under­scored the import­ance of sup­ply chain resi­li­ence, prompt­ing shifts such as “friend-shor­ing” and enhanced invent­ory strategies to mit­ig­ate risks. These devel­op­ments also reflect broader geo­pol­it­ical shifts, as nations ree­valu­ate depend­en­cies on crit­ical raw mater­i­als from con­flict zones.

As the year con­cludes, the foundry sec­tor faces a volat­ile mix of risks and oppor­tun­it­ies. While cau­tious optim­ism exists in some areas, over­all sen­ti­ment sug­gests that many play­ers are bra­cing for con­tin­ued uncer­tainty into 2025.

The Busi­ness Cli­mate Indic­ator (BCI) reversed its prior decline, improv­ing from ‑0.93 to ‑0.77 in Novem­ber. This mod­est rise sug­gests slight optim­ism in Europe’s man­u­fac­tur­ing out­look des­pite per­sist­ent chal­lenges. Crit­ical sec­tors such as auto­mot­ive, con­struc­tion, and machinery con­tinue to face head­winds from slug­gish global demand and high pro­duc­tion costs, exacer­bated by geo­pol­it­ical uncertainties.

Addi­tion­ally, man­u­fac­tur­ers are increas­ingly imple­ment­ing effi­ciency meas­ures and digital trans­form­a­tion strategies to coun­ter­act cost pres­sures and pos­i­tion them­selves com­pet­it­ively for 2025. This improve­ment in the BCI, though tent­at­ive, reflects a recog­ni­tion that with stra­tegic adjust­ments and resi­li­ence, Europe’s indus­trial base can weather the uncer­tain­ties of a chal­len­ging global environment.

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