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European foundries highlight robust demand back up in times of upheaval

The European Foundry Industry Sentiment Indicator (FISI) increased by 0.4 points in June and reached a value of 106.4 points. After the significant drop due to Russia’s invasion of Ukraine, the business climate of the European foundries is stabilising for the time being, despite all the uncertainties, says the European Foundry Association (CAEF).

While the assessment of the current business situation is slightly declining, the expectations for the coming six months are improving moderately. The historic drop of the FISI in recent weeks was, however, due to the latter. The fact that companies’ expectations are riding a rollercoaster given the great uncertainties is one of the few things that is momentarily certain.

The question of how much gas Russia will continue to supply in the coming weeks and months is the focus of public discussions. At the same time, energy prices are already threatening the existence of businesses in many places. Switching to alternative energy sources sometimes requires horrendous investments which, after two and a half years of the pandemic, now come up against rising interest rates. Foundry customers also need to be aware of this. Thus, producer prices for cast components continue to rise.

Meanwhile the Business Climate Indicator (BCI) decreased in May. The increase of 0.19 points brings the index to 1.47 points. After a rally in expectations of rising sales prices, which peaked in April, the situation is easing slightly. Meanwhile, rising incoming orders are giving the BCI a moderate boost.