Die casting market 2024: production of Italian foundries still falling in the second quarter
The recessionary trend in the foundry sector continued in the second quarter of 2024: the trend line outlines a contraction in production that reaches -8.9% compared to the same quarter of 2023. The economic situation also records a minus sign, after two quarters characterized by a weak recovery, although insufficient to support overall volumes: production in the last period has in fact fallen by -3.1% compared to the previous one.
The same dynamics also applies to turnover: the trend decline is -9.9% compared to the period April-June 2023, while at a cyclical level it is -4.2% compared to the first quarter of 2024.
The data emerging from the latest cyclical survey by the Assofond Study Center on the die-casting market in the period April-June 2024 are therefore not comforting and reflect a reality with few lights and many shadows.
"The second quarter was even worse than the first - underlines the president of Assofond, Fabio Zanardi - and it reminds me terribly of 2009, with double-digit declines for almost all companies in the sector. Mergers are fundamental for the mechanical, transport and energy industries: the decline in foundry production indicates a slowdown in the entire manufacturing sector, with recovery prospects that cannot be seen until at least 2025. There are, after all, several factors that determine the poor conditions of demand: high energy prices, inflation that is not falling enough in Europe and that is holding interest rates steady, economic uncertainty and geopolitical tensions. In Italy, in particular, the energy issue remains very hot: the Single National Price (PUN) of the Italian electricity exchange in June 2024 stood at €103/MWh (+9% compared to May 2024, at the highest values of the year). This means that we pay 42% more for electricity than in Germany (€72.89/MWh), 174% more than in France (€37.6/MWh), 84% more than in Spain (€56.08/MWh). A gap that undermines the competitiveness of all energy consumers. In recent days, support measures for businesses have been launched, such as the Energy release and the Transition 5.0 plan. However, both are not yet fully operational and it is essential to speed up the process. To promote recovery, strategic investments would also be needed along some value chains, such as that of renewable electricity production and large infrastructure. We need to act quickly, otherwise our manufacturing risks disappearing».
Production and turnover of the die-casting market in the first part of 2024
In terms of production, the weak economic push at the beginning of the year has run out of steam: the figure is once again negative (-3.1%) and the trend line remains well below the levels of the second quarter of 2023 (-8.9%). The majority of the foundries that participated in the survey (53.3%) declare that they have suffered a drop in production levels. For 20%, the quantities produced have remained the same, while 26.7% declare an increase in production. Among those who indicated a drop, the majority (65%) attribute the result to a contraction and weakness in demand from the foundry market.
Also with regard to turnover, the loss in trend terms reaches -9.9% on the same quarter of 2023: a steadily negative trend since the beginning of the year.
Similarly to what was highlighted for production, after two quarters with a positive sign, the turnover trend also turns negative: -4.2% on the first quarter of the year. 70% of the foundries that responded to the survey declared that they had suffered a drop in turnover compared to the first quarter of the year: the reduction in quantities shipped is the main reason (75.0%).
Sector dynamics of the die-casting market 2024
The trend line improves slightly for ferrous metal foundries, but remains strongly negative: -9.7% compared to the second quarter of 2023. In fact, this is not a rebound (the economic situation is also negative): the data is rather affected by the sharp drop in production levels that occurred in the same period of 2023. On the other hand, production of non-ferrous metal foundries worsens considerably, which, after a first quarter at the same levels as 2023, returns to negative territory (-6.8% on the period April-June 2023).
In both cases, production levels are decreasing also due to the losses observed at the economic level: ferrous foundries confirm a trend that has already been progressively declining for two quarters, with the second recording a negative figure of -1.9% on the previous quarter; non-ferrous foundries, after a first quarter of strong growth (+18.2% over the period October-December 2023) recorded a sharp slowdown, equal to -6.7% of castings produced compared to the previous three months.
The turnover of ferrous foundries in 2024 stands at -9.2% compared to the same quarter of 2023. The lower loss observed from the trend line is only due to a lower turnover in the quarters of competence of 2023: the situation, in fact, is still negative and equal to -1.7% compared to the first quarter of 2024, when a decline of -2.1% was already recorded on the last quarter of 2023.
The decline in the turnover of non-ferrous foundries is more marked and equal to -11.6% on the second quarter of 2023: the trend confirms the markedly recessive picture also for a situation that reaches -11.0% loss on the first quarter of 2024 and after the two previous periods in which, despite the growth in turnover on the respective previous quarters equal to +14.0% and +8.4% respectively, it was not even possible to match the results on a trend.
Foundry labor market
The survey conducted by the Assofond Study Center also maps the trend of the labor market in the sector every six months. Despite the stagnant market situation, in the first half of 2024 the majority of foundries (73.3%) looked for new staff. A significant figure, which confirms once again the difficulties in finding staff in line with the needs of companies. The most sought-after profiles are specialized workers, indicated in 52.9% of the responses. Only 13.6% of the sample expressed full satisfaction with the results of the research carried out, while the absolute majority of companies (72.7%) only partially achieved their objectives.
Source: In Fonderia – ll magazine dell’industria fusoria italiana