2023
Metalcasting
Outlook
Business Forecast
2023 Metalcasting Outlook
To evaluate the state of the industry we
surveyed foundry and diecasting managers
and decisionmakers about their activities
during 2022 and their expectations for 2023 —
asking them to identify how they are faring and
the challenges they face, and how they plan to
continue their progress.
A Staff Report
T
he end of one year and the start of a new one present a natural moment for inquiry: What has been accomplished?
What can be expected? This sort of evaluation is not
confined to the clock or calendar, of course: we see it happening
daily in finance, quarterly in technology and business. Many
people make such a personal evaluation daily.
A business like metalcasting needs regular reevaluation too,
and that’s why we present the FM&T Metalcasting Business
Outlook.
Metalcasting is more than a business, of course, and its status
or progress is tracked over decades or centuries. Metalcasters
themselves understand this. They know what is working well
and what needs to be enhanced. They know how the industry
and technology is vulnerable to competition, and they recognize
the particular strengths that metalcasting can rely on to thrive.
Metalcasters our source of understanding for just that reason.
Each year, Foundry Management & Technology surveys our
metalcasting readers to gain some perspective – if not consensus
– on the state of affairs in North America’s foundry and diecasting operations. We’re proud of the audience we have developed
and maintain, and we rely on their insights about the work they
do. We collect facts, but we find discern knowledge from the
concerns expressed, and the expectations or concerns raised,
by men and women working in foundries and diecasting plants.
It’s an effort to go beyond the facts, to understand not only
the present circumstances of these operations, but also the underlying conditions shaping those businesses. We also seek
to understand how these facts are received and understood by
metalcasting decision-makers. We want their assessments of current conditions and we want to record the issues that give them
confidence or concern, in their own businesses, in their supply
chains and markets, and in the economy. We want to learn what
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decisions they face in the business cycle just ahead, and to understand better their expectations for the future of their enterprises.
We surveyed readers by email over a period of four weeks
during Q4 2022. We are confident that the 2023 Outlook respondents reflect the metalcasting industry we cover, and reliably
represent the range and variety of operations included in it.
As has been the case in this annual series, the 2023 survey
respondents represent the overall metalcasting industry, namely:
aluminum foundries and diecasters (20.7%), gray iron foundries
(13.29%), ductile iron foundries (26.58%), brass/bronze casting
operations (19.61%), steel foundries (15.03%), and producers of
multiple and/or other metals and materials (4.8%.) Other metals
cast by survey respondents include stainless steels, magnesium,
high-chrome iron, and nickel-based super-alloys.
Similarly, and as in the past, the responses to the 2023 survey
give a representative view of individuals working in metalcasting operations across of all sizes. Thus, 5.45% of respondents
are employed by operations comprising more than 250 people;
and 21.13% represent operations with 100 to 249 employees. Of
the rest, 29.85% of respondents are employed by metalcasting
operations with 50-99 employees; 34.42% are with businesses
20.70%
19.61%
26.58%
13.29%
15.03%
4.80%
How many employees work in
your metalcasting operation?
Under 20
20 to 49
50 to 99
100 to 249
250 and over
9.15%
34.42%
29.85%
21.13%
5.45%
How will your 2022 casting
shipments (tonnage) compare
with 2021 shipments?
Stay the same
Increase
Decrease
29.80%
57.40%
12.80%
FM&T’s annual Outlook survey begins by determining the
metalcasting respondents’ sense of current business conditions,
setting 2022 casting shipment volumes (tonnage) as a frame not
just of the conditions as they are but also to gauge expectations
for the future. How much tonnage they have shipped, and how
much they expect to ship, is a proxy for their satisfaction and
confidence about their businesses.
We asked respondents to compare the current (2022) year’s
casting shipments to the 2021 total, and more than half (57.40%)
of all respondents report an increase, something less than a
third of them (31.5%) expect the year-over-year results to be
unchanged. Less than one-eighth (12.8%) of respondents expect
lower shipment volumes for 2022 versus 2021.
The confident portion of the respondents are more than a little
Stay the same
Increase
Decrease
33.48%
50.68%
15.84%
Please estimate your total planned capital
expenditures for 2023
Less than $100,000
$101,000 to $250,000
$251,000 to $500,000
$501,000 to $1 million
$1 million to $5 million
More than $5 million
10.49%
18.53%
31.25%
22.32%
14.51%
2.90%
What types of capital
expenditures
are you planning in 2023?
New Plant
New Equipment
Expansion/Addition to existing plant
None
26.91%
55.61%
30.27%
7.40%
What are your borrowing plans
for 2023?
How do you expect your 2023
casting shipments (tonnage) to
compare with 2022 shipments?
Stay the same
Increase
Decrease
Reading the results
How will your 2023 capital
expenditures compare to your
2022 capital expenditures?
What is the principal metal that
you cast?
Aluminum
Brass/Bronze
Ductile Iron
Gray Iron
Steel
Other
that have 20 to 49 workers; and 9.15% of respondents represent
metalcasting businesses that have 20 or fewer employees.
The range of the products they cast and the scale of their organizations validate these survey respondents as representative of
the metalcasting industry during 2022.
31.53%
54.95%
13.51%
Increase debt
Retire debt
Stay about the same
Not currently carrying any debt
Seeking new equity investment
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14.35%
21.19%
38.85%
17.88%
7.73%
Metalcasting Outlook
bit optimistic about the scale of the improvement in shipment
volume underway in 2022, as 36.7% of them foresee a rise of
11-25%; and 24.88% of them expect an increase in the 26-50%
range. Another 15.52% put the improvement at 51-75% over
last year’s shipment total. Somewhat smaller portions expect
76-90% or even +90% increases over last year’s shipment totals.
To explain the current year’s growth in shipments, most of the
Outlook survey respondents pointed to the fact that 2021 continued to bear the effects of Covid-19 restrictions on production
activity, on the volume of orders, and the supply chains that are
essential to keeping casting orders on track. “Issues with COVID
are mostly resolved and business has been steadily increasing
during 2022,” one respondent reported. Another pointed to “Increases in purchase orders from our large customers. Some of it
has to do with U.S. government spending that is resulting in demand for firefighting equipment, hose valves and couplings, and
electrical transmission and distribution parts. There is pent-up
demand for machinery parts, railroad cars/locomotives and consumer products driving this volume of orders.”
Do you plan to purchase any of
the following types of equipment
in 2023?
Air compressors
Automatic pouring system
Blast cleaning equipment
Continuous mixers
Conveyors
Coremaking machines
Cranes/hoists
Cutoff equipment
Design software/hardware
Diecasting machines
Grinding equipment
Heat treating equipment
Investment casting system
Lab equipment
Lift trucks or loaders
Lost foam system
Machine tools
Melting equipment
Molding machines
Permanent mold system
Pollution controls
Power control equipment/systems
Process computers
Rapid prototyping equipment
Robots/manipulators
Sand Prep equipment
Sand reclamation equipment
Shakeout/punchout equipment
Simulation software
Testing/inspection equipment
Other
16.14%
17.27%
20.00%
21.14%
19.09%
23.64%
16.14%
15.68%
17.73%
12.73%
17.95%
9.77%
9.77%
12.50%
10.91%
8.41%
7.95%
8.64%
12.50%
7.27%
9.77%
8.18%
10.23%
9.77%
11.36%
11.36%
9.32%
4.09%
6.14%
9.32%
2.50%
For that 12.8% of all respondents who expect 2022 shipments
to decrease year-over-year, the largest portion (29.63%) expect
the drop to be in the 26-50% range, and 24.7% peg the decrease
to be in the 11-25% range. A further 19.44% are expecting a
51-75% decrease in shipments, year over year, while 17.3% of
these respondents are prepping for a 0-10% shortfall, and 7.72%
foresee a 76-90% decrease.
These respondents offer somewhat more specific analyses of
their 2022 drop in shipments: “Inflation causing rising interest
rates has caused the economy to slow down and demand for our
product to decrease,” one foundryman explained. According to
another, “Recent order status overall has been dipping during the
past two months, and the recession effects are making it difficult
to forecast sales ahead.”
Ready to rise?
The Outlook survey takes the same approach to evaluate the
prospects for metalcasting industry growth in 2023. Asked,
“How do you expect your 2023 casting shipments (tonnage)
to compare with 2022 shipments?”, 54.9% of respondents anticipate increased output next year, and 31.53% are expecting
next year’s shipments to be comparable to the current year. Just
13.5%, a little above one-eighth of all respondents, believe that
2023 shipments will decline versus 2022.
Indicate which of the following issues have been
significant problems for your operation
during 2022.
Availability of Capital
Energy Costs
Energy Shortages
EPA Requirements
Human Resources
Imported Castings
Interest Rates
Labor Costs
Labor Shortage
Lack of Orders
Material Shortages
Medical/Insurance Costs
On-Time Delivery of Castings
OSHA Requirements
Plant Management
Plant Operations
Product Liability
Product Marketing/Sales
Quality of Castings
Raw Materials Cost
Skills Shortage
Supply Chain Disruptions
Tariffs
Training
Workers' Compensation Costs
Other
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16.00%
30.44%
23.11%
24.00%
28.89%
14.00%
13.33%
23.33%
24.67%
13.78%
18.00%
10.00%
10.44%
9.56%
9.56%
12.22%
5.33%
9.56%
10.00%
20.67%
17.33%
14.89%
6.67%
8.44%
2.89%
1.11%
Did you purchase any of the
following types of equipment
during 2022?
Air compressors
Automatic pouring system
Blast cleaning equipment
Continuous mixers
Conveyors
Coremaking machines
Cranes/hoists
Cutoff equipment
Design software/hardware
Diecasting machines
Grinding equipment
Heat treating equipment
Investment casting system
Lab equipment
Lift trucks or loaders
Lost foam system
Machine tools
Melting equipment
Molding machines
Permanent mold system
Pollution controls
Power control equipment/systems
Process computers
Rapid prototyping equipment
Robots/manipulators
Sand Prep equipment
Sand reclamation equipment
Shakeout/punchout equipment
Simulation software
Testing/inspection equipment
Other
20.77%
21.22%
23.25%
21.22%
23.48%
13.54%
20.54%
17.61%
16.48%
12.87%
19.41%
9.71%
11.06%
16.70%
13.54%
6.77%
15.12%
14.22%
11.74%
9.03%
12.87%
9.93%
9.93%
11.06%
7.90%
10.61%
8.35%
9.03%
7.90%
8.35%
2.26%
Digging into these responses, we discover that 30.5% of
those anticipating increased casting shipments in 2023 expect the
rise to be in the 11-25% range, and 28.4% it to be in the 26-50%
range. Another 16.4% believe the improvement will be 0-10%
year-over-year, 13.0% expect an increase of 51-75%, and 9.4%
are looking ahead to a 76-90% rise in 2023 shipments.
Where do they draw their confidence about next year? Reshoring and/or onshoring of orders was cited by a number of respondents. “Discussions with our customers have indicated increased
demand moving into the 3Q 2023,” one of them explained, while
another one offered: “We believe the manufacturing economy
will be stable in 2023… near capacity.”
Still another said: “We have been trending that way – except
for 2020, at the pandemic’s peak. The unfortunate closings of
other small foundries helped.”
Of that smaller number of respondents who believe 2023 shipments will decrease over 2022, the largest portion (32.4%) put
the coming shipment decline in the 26-50% range, and 26.0%
see 11-25% drop in shipments ahead. 15.76% of these respondents are prepping for a 0-10% decrease, 14.5% are set for a 5175% decrease, and 10.0% of them believe their shipments will
fall 76-90% versus 2022.
“The economy will remain stagnant or in recession into
2023, regaining momentum in the second or third quarter,” a
respondent wrote.
What is the plan?
Optimism or pessimism are good indicators, but what is on the
metalcasters’ agenda for 2023? Specifically, what are their investment and spending plans. Confident businesses prepare for
good opportunities. They make capital investment plans.
When we asked Outlook survey respondents to estimate their
businesses’ 2023 capital expenditures, compared with 2022
spending, 50.7% of them indicated the investment levels will
increase, and 33.5% reported the spending totals will remain
about the same as in 2022. 15.8% reported capital spending will
decrease next year.
For those metalcasting operations where CapEx spending
is planned to increase, 33.85% of respondents told us the yearover-year increase will be in the 26-50% range, and 27.7% put
the increase at 11-25%. 16.15% see an increase of 51-75% over
last year, and 11.8% see the rise in the 0-10% range.
Of the smaller number of respondents who reported decreased
CapEx plans for 2023, 33.85% gauged that coming drop at 2650% year-over-year, and 27.7% pegged it falling by 11-25%.
Another 16.15% said the decrease will be 51-75%, 11.8% are
expecting a spending drop of 0-10%, 8.5% see the decrease at
76-90%, and 2.0% say it will be a drop of more than 90%.
It’s always intriguing to know how next year’s capital spending will be directed, and 55.06% of respondents reported that
new plant equipment is on order. 30.3% indicated their plans
include plant expansions or additions, and 27% of all respondents revealed plans for new plants in 2023. (The total – which
represents the results of a multiple-choice question, so responses
exceed 100% – also includes 7.4% of respondents who are not
planning for new plants, expansions, or equipment in 2023.)
Asked to estimate their operations’ total planned capital expenditures during 2023, 2.9% of respondents reported the figure
is over $5 million, and 14.5% projected it at $1 million to $5 million. 22.3% reported spending plants in the $501,000-$1 million
range; and 31.25% pegged the number at $251,000-$500,000.
18.5% told us the spending plan ranges from $101,000 to
What percentage of “normal”
plant capacity is represented
by your 2022 average monthly
casting production?
0-50%
51-60%
61-75%
76-90%
91-100%
over 100%
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12.78%
22.20%
23.77%
28.92%
9.42%
2.91%
Metalcasting Outlook
$250,000, and 10.5% put the number at less than $100,000.
Where will the money come from? 14.35% of respondents
indicate their operations plan to increase debt levels during 2023,
and 21.19% expect to see debt retired next year. 38.85% expect
the level of debt carried by their operations to remain about the
same as in 2022, and 17.9% report their operations are not carrying debt, while 7.73% are seeking new equity investments.
What do you need?
Metalcasting operations have innumerable ways to invest to
improve their processes, for product quality, efficiency, productivity, and other objectives. We presented survey respondents
with an extensive choice of equipment options for their investments, in 2022 and 2023 – multiple choice questions that yield
totals in excess of 100%. The totals, however, tell us some of the
needs for foundries and diecasting operations.
Recalling their 2022 equipment spending, respondents’ top
choice was “conveyors”, selected by 23.5% of the field – indicating a need to handle processed materials and/or parts efficiently.
Close in second place, selected by 23.25% of all respondents
is “blast cleaning equipment”, suggesting a need to increase or
improve high-volume cleaning of castings.
Also drawing investment spending during the past year have
been “automatic pouring systems” and “continuous mixers”,
tying for the third place with 21.22% of all respondents; “air
Indicate which of the following issues are
likely to be significant problems for your
operation in 2023.
Availability of Capital
Energy Costs
Energy Shortages
EPA Requirements
Human Resources
Imported Castings
Interest Rates
Labor Costs
Labor Shortage
Lack of Orders
Material Shortages
Medical/Insurance Costs
On-Time Delivery of Castings
OSHA Requirements
Plant Management
Plant Operations
Product Liability
Product Marketing/Sales
Quality of Castings
Raw Materials Cost
Skills Shortage
Supply Chain Disruptions
Tariffs
Training
Workers' Compensation Costs
Other
20.09%
27.15%
25.61%
19.21%
23.18%
18.54%
18.10%
19.21%
24.50%
9.27%
16.56%
9.93%
12.14%
9.71%
7.73%
10.60%
9.93%
7.28%
9.05%
19.21%
17.22%
12.36%
3.75%
4.86%
3.31%
0.44%
compressors”, for 20.77% of all respondents; and “cranes and
hoists”, for 20.54% of respondents.
Other high-ranking investment choices for 2022 were “grinding equipment” (19.4%) and “cut-off equipment” (17.6%.)
Where are the top spending targets for next year? The most
popular selection, by 23.64% of all respondents, is “coremaking
equipment”, suggesting that production volumes and/or efficiency standards will be rising for complex castings.
Other common choices for Outlook survey respondents are
“continuous mixers” (21.14%), “blast cleaning equipment”
(20.0%), “grinding equipment” (17.95%) and “design software/
hardware” (17.73%.) “Automatic pouring systems” (17.27%)
and “air compressors” (16.14%) will continue to draw investment spending from survey respondents in 2023.
What’s your problem?
The Outlook survey also seeks to determine the issues and concerns that are shaping metalcasting operations in 2023, those that
are driving the decisions that owners, executives, and managers
must make. We asked respondents to identify the issues they
have faced during the past year, those that have challenged their
operations’ performance, and which ones they expect to face in
2023. (Once again, the multiple-choice questions result in survey
totals that exceed 100%.)
Asked to indicate the “significant problems” their operations
faced during 2022, the survey respondents’ most-selected issue
is “energy costs” (30.4%), followed by “human resources”
(28.9%), “labor shortages” (24.7%), “EPA requirements”
How are imported castings
affecting your business?
No effect
Imported castings remain a competitive
factor
Tariffs have impacted our customers’
demand for castings
17.26%
45.29%
30.49%
Imported castings are becoming less of a
competitive factor
21.97%
We’re developing our own export business
9.42%
No days of production lost
22.64%
Have you gained new orders
from reshored manufacturing
programs?
Yes
81.12%
No
18.88%
Do you plan to increase
employment totals during 2023?
Yes
82.72%
No
17.28%
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(24.0%), and “labor costs” (23.3%) completing the top five.
Other common issues facing metalcasters during the past
year were “energy shortages” (23.1%), “raw materials costs”
(20.67%), “material shortages” (18.0%.)
We presented the same choices and asked respondents to
identify the issues they expect will challenge their operations
in 2023. Again their most-commonly selected issue is “energy
costs” (27.15%), followed by “energy shortages” (25.6%), “labor shortages” (24.5%), “human resources” (23.2%), and “availability of capital” (20.1%.)
Three more issues drew an equal number of selections
from respondents: “EPA requirements” (19.2%), “labor costs”
(19.2%), and “raw materials costs” (19.2%.)
Some issues are persistent in the challenge they present to
metalcasters, and for decades one of those issues has been casting imports. The Outlook survey asked respondents how imported castings have affected their operations during 2022, and
45.3% of all respondents confirmed that imports remain a competitive factor for them; 21.9% reported that imported castings
are becoming less of a competitive factors, and 17.3% reported
imports have had no effect on their business. 30.5% reported that
import tariffs have affected customers’ demand for castings.
Related to the issue of imported castings is the more recent
factor known as “reshoring” – meaning production programs
that once involved manufacturing overseas being relocated to
the U.S. The reshoring trend may be the most consequential
development in metalcasting in recent decades – reallocating
production programs to domestic suppliers, and justifying an
overdue reinvestment in metalcasting capacity.
We asked Outlook survey respondents if their businesses
have gained casting orders thanks to reshored manufacturing
programs: 81.1% confirmed they have gained orders as a result,
and 18.9% indicated they had not.
What happens next?
Reshoring may also be the way to demonstrate to the larger manufacturing community what metalcasters have always known:
that the process, the industry, and the products have a permanent
place in any civilized society. There are competing processes and
alternative choices for various applications – but for reliability
and scale of production, for cost competitive manufacturing,
there is no option other than metalcasting.
So what is the potential for expansion of metalcasting? We
asked Outlook survey respondents to indicate what percentage
of their normal plant capacity is represented by 2022’s average
monthly casting production: 12.8% reported they have operated
at 0-50% of capacity in 2022; 22.2% of respondents have operated at 51-60%; 23.8% have operated at 61-75%; 28.9% have
operated at 76-90%; and 9.4% have operated at 91-100%. In addition, 2.9% of respondents indicated they have operated above
100% capacity during 2022.
Asked to project how the overall U.S. economy (GDP) will
perform during 2023 compared to 2022, 4.32% expect a significant decline, and 19.15% expect a less significant decline.
27.62% of respondents expect 2023 to continue in about the same
way as 2022, while 33.4% are looking forward to some improvement next year, and 15.6% expect significant improvement.
Are they preparing for their own improved performance in
2023? When asked if they expect to increase their operation’s
employment total next year, 82.7% of all survey respondents
answered affirmatively.
The FM&T Business Outlook survey seeks to learn what
metalcasters know about their industry, and what they sense
about the economy in which they work. It’s the product of
their effort – for which we offer thanks and wish them continued success.
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