Foundry industry

The largest obstacle for the industry remains the shortage of skilled staff. In April, the index was 5.6 points down from its level at the beginning of the year but, at 41.7 points, still at a very high level. Insufficient demand is less frequently regarded as a problem with the index dropping 2.4 points down to 19.1 points. Financing difficulties are almost irrelevant, remaining steady at the low level of 2.2 points (down 0.1 points).

Information and communications technology companies are still planning on increasing their workforce. Employment expectations increased by 5.1 points to 35.3 points which is its highest level this year. This means that the overwhelming majority of companies plan to increase their staff in the next three months. The demand for skilled digital workers is high and has continued to rise. A large majority of companies expect the prices of their products and services to rise. Already on a high level, the index increased another 5.1 points to 42.7 points.

The impact of the war, sanctions and rising energy prices is pressing down on sentiment across the economy. The ifo business climate index rose by a slight 2.3 points and is now in positive territory again at 0.7 points. The assessment of the current business situation remained almost steady at 21.5 points (up 0.3 points). Expectations increased by 3.9 points but, at minus 18.2 points, are still firmly within negative territory.

Contact: Dr. Florian Bayer / Phone: +49 30 2757 6162 / Mail: f.bayer@bitkom.org

Foundry industry

The mood among German foundries in spring 2022 is very tense. The balance of good and bad ratings as of May remained well inside positive territory at plus 30.6 points. Business sentiment has nonetheless cooled down significantly since Russia attacked Ukraine. Expectations for the next six months recorded their biggest drop ever, down to minus 22.2 points.

The war has caused a number of difficulties for German foundries. While orders from machinery manufacturing remain on a very high level, propping up the foundries which supply them, foundries supplying the automotive industry are experiencing increasing problems. Disruptions to supply chains in the largest group of customers of cast components means that purchase orders have not been activated and the latest figures show a clear decline in orders.

On the other side, exploding procurement costs and drastically increasing energy prices weigh heavily on the energy-intensive foundry industry. The steep increase in the prices of many energy and nonenergy commodities in the second half of last year already placed severe strain on foundries and this situation has got a lot worse since the start of the war.

A possible shortage of gas is currently a big risk for German foundries. All foundries in Germany, irrespective of the materials they use, are dependent on gas in their production. Many companies need gas for their melting process for technical reasons and gas is also used in the preparatory and finishing processes of foundries and cannot be substituted. The consequences of a reduced availability of gas are difficult to quantify as the complex foundry processes are not readily interrupted and restarted. A