European Foundry Industry Sentiment

Janu­ary 2025: 

European Foundry Industry Sen­ti­ment Indic­ator, Janu­ary 2025: FISI shows Improve­ment in Janu­ary 2025

In Janu­ary 2025, the European Foundry Industry Sen­ti­ment Indic­ator (FISI) increased to 91.3 index points, up from 89.0 in Decem­ber 2024. This rise sug­gests a mod­est improve­ment in the industry’s out­look, mov­ing closer to the neut­ral 100-point mark. This devel­op­ment is partly due to pos­it­ive expect­a­tions for the second half of 2025, as busi­nesses anti­cip­ate poten­tial growth and sta­bil­iz­a­tion in demand.

Recent data indic­ate signs of sta­bil­iz­a­tion in the euro­zone’s man­u­fac­tur­ing sec­tor. The euro­zone man­u­fac­tur­ing Pur­chas­ing Man­agers’ Index (PMI) rose to 46.6 in Janu­ary, up from 45.1 in Decem­ber, approach­ing the 50-point threshold that sep­ar­ates growth from con­trac­tion. This improve­ment is attrib­uted to factors such as firms look­ing past rising costs and poten­tial U.S. tar­iffs, as well as an increase in new orders, which reached an eight-month high. Addi­tion­ally, the European Cent­ral Bank’s recent interest rate cut and poten­tial fur­ther reduc­tions may sup­port busi­nesses and con­sumers. Con­fid­ence surged to its highest in nearly three years, sug­gest­ing a more optim­istic view of the future. Energy prices have slightly mod­er­ated com­pared to their peak, alle­vi­at­ing some cost pres­sures for foundries. How­ever, elev­ated grid costs and infla­tion­ary pres­sures per­sist, con­tinu­ing to chal­lenge oper­a­tional effi­ciency. In response, many foundries are imple­ment­ing sup­ply chain adjust­ments and adopt­ing more resi­li­ent strategies to mit­ig­ate risks asso­ci­ated with energy volat­il­ity and geo­pol­it­ical uncertainties.

Look­ing ahead, there is cau­tious optim­ism for the second half of 2025. The sta­bil­iz­a­tion in man­u­fac­tur­ing activ­ity and the poten­tial for fur­ther policy meas­ures to sup­port the eco­nomy con­trib­ute to a more pos­it­ive out­look. While chal­lenges remain, the industry is pos­i­tion­ing itself to cap­it­al­ize on emer­ging oppor­tun­it­ies, anti­cip­at­ing growth in the lat­ter part of the year.

In Janu­ary 2025, the Busi­ness Cli­mate Indic­ator (BCI) declined from ‑0.91 in Decem­ber to ‑0.94, indic­at­ing a con­tin­ued sense of cau­tion among European busi­nesses. This down­turn reflects ongo­ing chal­lenges, par­tic­u­larly within the man­u­fac­tur­ing sec­tor, which con­tin­ues to face pres­sures such as high energy costs and reduced con­sumer demand.

Des­pite these chal­lenges, there are signs of cau­tious optim­ism. The euro zone’s GDP growth is expec­ted to hover around +1.0% in 2025, up slightly from +0.7% in 2024. These devel­op­ments sug­gest that while the BCI has decreased, there is poten­tial for recov­ery in the com­ing months as firms adjust to the chan­ging 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.

EFF Con­tact:

Johannes Kappes
Sec­ret­ary Com­mis­sion for Eco­nom­ics & Stat­ist­ics
phone: +49 211 68 71 — 291
mail: secretarygeneral@eff-eu.org