Survey: Sentiment in the European foundry industry

The European Foundry Federation (FISI) Sentiment Indicator has fallen for the fourth consecutive month. With a value of 2.1 index points less than in May, the index reaches a value of 98.6 points in June. This means that the value is now below the initial value of 100.0 in 2015.

For June 2023, CAEF – The European Foundry Association – summarises its survey by saying that difficult times are ahead and weak expectations for the future prevail. Although companies are currently still working off high order backlogs, incoming orders are collapsing in several sectors. This intensifies the negative trend. A turnaround is not in sight in the expectations for the coming six months.

In recent months, the development of steel and iron foundries as well as non-ferrous metal foundries was contrary due to statistical base effects. Now a negative turnaround is setting in for foundries in all material groups compared to the previous month.

The Business Climate Indicator (BCI) drops by 0.13 points in June, bringing the index to 0.06 points. This means that the value is now almost back at the level of the end of 2020, when it turned negative. Overall, sales price expectations for the coming month fall along with current production levels and order backlogs.

Background

The FISI is the earliest available composite indicator providing information on the performance of the European foundry industry. It is published by CAEF every month and is based on surveys of the European foundry industry. 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. Each month, the BCI assesses the development conditions of the manufacturing sector in the euro area. It is based on five industry opinion survey balances: production trends, order books, export order books, inventories and production expectations.

(Source: CAEF/2023)