FOLLOW US Twitter CONTACT US FTJ Email address Phone number

The economy cools down with the temperatures

The European Foundry Industry Sentiment Indicator (FISI) decreased by 1.2 points in October and reached a value of 102.8 points. Again, the overall expectations for the next six months and the assessment of the current business situation dropped, says the European foundry association CAEF. This follows the decrease of 2.6 points in September, marking the lowest value in the last 21 months and the sharpest month to month decline since March 2020.
A closer look at the October figures reveals that iron foundries report a significant decrease in the current business situation for the second time in a row, while the expectations for the next six months show no change compared to the previous month at a low base. The situation is different for non-ferrous foundries. Here, the assessment of the situation remains at the weak level of the previous month, while expectations continue to decline.
Looking ahead to the year 2023, there are stronger signs of a recession in several European economies. In its October forecast, the IMF predicts negative GDP growth rates for Germany (-0.3 per cent) and Italy (-0.2 per cent). And for other large economies, the adjustments to the forecasts for the coming year compared to the April forecast are in part serious. Although the forecasts for North America and Asia were also revised downwards, neither the expected GDP growth rates (USA 1.0 per cent; China 4.4 per cent) nor the forecast revisions compared to the last forecast reach the European level. 
It remains unclear how strongly demand for cast components will decline. While order books are still at a good level in many markets, incoming orders are already declining noticeably at the onset of winter. 
Meanwhile the Business Climate Indicator (BCI) decreased in October. The decrease of 0.06 points brings the index to 0.76 points. An increased assessment of stocks of finished products and decreasing expectations of sales prices balance each other out.