Italian foundry market in the first quarter of 2025: prolonged stagnation with no signs of real recovery
The Italian foundry market in the first quarter of 2025 presents a complex picture characterized by seemingly contradictory signals. While economic data show a moderate increase in production and turnover compared to the last quarter of 2024, an in-depth analysis reveals a very different reality. This improvement essentially represents a natural rebound, driven primarily by the increased number of days worked compared to the previous period, which included the Christmas holidays. The trend compared to the same quarter of 2024 remains decidedly negative, confirming the crisis in the foundry sector that has persisted for several quarters now.
"The data for the first quarter of 2025 confirm the feelings we've had for months: we're in a phase where the sector appears to have reached the bottom of the slide, but without showing concrete signs of recovery," emphasizes Fabio Zanardi, president of Assofond. His words perfectly outline the delicate situation facing the Italian foundry industry, caught between the hope of a recovery and the harsh reality of the numbers.
Detailed Analysis: Production and Revenue Between Rebounds and Contractions
Production Performance: A Fake Improvement
Production recorded a 6.4% quarterly increase in the first quarter of 2025 compared to the previous quarter, with essentially identical trends for both sectors. Ferrous metal foundries recorded a 6.4% increase, while non-ferrous metal foundries achieved a 6.3% increase. However, a year-on-year comparison with the first quarter of 2024 reveals the true extent of the crisis in the foundry sector: an overall decline of 9.5%, with ferrous foundries down 8.5% and non-ferrous foundries recording an even more pronounced contraction of 11.9%.
These data highlight how the apparent economic improvement is primarily due to seasonal factors rather than a true reversal of the trend. The outlook for Italian foundries therefore remains anchored to a structural contraction that requires systemic interventions to be effectively addressed.
Revenue Trends: Apparent Growth but Substantial Losses
Revenue followed a similar trend, recording quarterly growth of 9.2% over the previous quarter. Ferrous foundries posted a 6.6% increase, while non-ferrous foundries showed a more lively performance, up 14.6%. However, revenues also remained negative for the entire sector (-8.7%), with ferrous foundries down 8.2% and non-ferrous foundries down 9.7%.
This disparity between quarterly and quarterly performance highlights the fragile nature of the sector and the need to look beyond short-term data to understand the true dynamics of foundry performance in 2025.
Driving Factors and Market Outlook
Reasons for the Economic Rebound: Calendar vs. Demand
An analysis of the underlying economic changes confirms the predominantly technical nature of the observed improvement. Among foundries that recorded an increase in production in the first three months of the year, 48.3% of the sample identified the increased number of days worked compared to the previous quarter as the primary reason, confirming that the rebound was essentially due to calendar factors.
However, a positive sign also emerges in the form of increased market demand, cited by 37.9% of the sample. This figure, though a minority, suggests that active market space still exists, although not sufficient to offset the structural difficulties of the sector. Regarding turnover, economic growth was driven primarily by the increase in quantities shipped, indicating a certain ability to transform demand into actual revenues.
Order Visibility: An Ever-Shortening Horizon
The order visibility picture presents particularly worrying elements for the prospects of Italian foundries. Levels remain very low, well below the sufficiency threshold, showing no signs of improvement compared to previous quarters. The situation varies by production type: cast iron maintains an average visibility of 2.2 months, while steel has seen its visibility decline from 1.3 to 0.8 months, and non-ferrous metals have contracted from 2.7 to 2.5 months.
These data reflect a market characterized by extreme uncertainty and short-term planning, factors that significantly hinder companies' ability to plan medium- to long-term investments and development.
Confidence and Future Expectations
Sentiment Indicators: Caution and Uncertainty
Business climate indicators confirm the prolonged stagnation that characterizes the Italian foundry market in the first quarter of 2025. The March ACT index, which measures general sentiment in the sector, exceeds the 50-point threshold, reaching 53.2, reflecting the economic improvement compared to the previous quarter.
However, the SIX index, which measures expectations for the next six months, while remaining above the sufficient threshold (53.2 points), shows a decline compared to the previous month, when it had already slowed compared to the beginning of the year. The distribution of forecasts highlights a strong propensity for caution: 61.3% of the sample forecasts remain stable, while the percentage of foundries expressing negative expectations is increasing (12.9%) and the percentage of those expecting a slight improvement is decreasing (25.8%).
Cost Pressures and Economic Sustainability
The Devastating Impact of Energy on Margins
The margin picture presents critical aspects that amplify the sector's structural difficulties. The downward trend in turnover and production is offset by rapidly rising energy costs, creating a particularly severe economic squeeze. The PUN (Single National Electricity Price) recorded a 49.6% increase compared to the first quarter of 2024, significantly increasing overall production costs.
This dynamic represents one of the most critical factors for foundry performance in 2025, as the foundry sector is highly energy-intensive. The inability to fully pass these increases on to sales prices, in a context of weak demand, drastically compresses companies' operating margins.
Strategic Outlook and Need for Intervention
The Need for Institutional Support
President Zanardi's remarks highlight the need for a paradigm shift in the approach to the sector: "Prospects for recovery are not currently supported by a solid order book, but appear to be driven more by hope than concrete evidence. The uncertainty of the global scenario, linked to economic policies and risks such as the introduction of new barriers to international trade, not only does not rule out the possibility of a further decline, but is already condemning the sector to investment stagnation."
The prospects for Italian foundries therefore require coordinated intervention at the institutional level. "To change this scenario," Zanardi concludes, "it is essential that European and national institutions translate into concrete measures the awareness, which finally seems to exist, of the need to support the continent's production chains."
Conclusions: A Directionless Transition
The Italian foundry sector is in a prolonged period of stagnation, which the first quarter of 2025 failed to convincingly break. Despite a slight economic improvement, expected after a challenging fourth quarter of 2024 marked by lengthy production shutdowns over the Christmas holidays, the sector remains anchored to negative trend data that has persisted for several quarters.
The decline that began in 2024 appears to have halted, but with no clear prospect of recovery in sight. The performance of foundries in 2025 therefore appears to be characterized by a precarious balance, where economic stability is failing to mask the structural difficulties that require long-term strategic responses to be effectively addressed.
Source: In Fonderia – Il magazine dell’industria fusoria italiana