According to the study, the foundry industry in Germany comprises 545 companies. They employ around 67,700 people, generate gross value added of EUR 4.9 billion and achieve a production value of EUR 14 billion.
Strong presence in rural areas
The sector is strongly characterised by medium-sized companies: around 80 per cent of businesses have fewer than 250 employees. Average gross annual wages amount to EUR 53,168 per employee, well above the overall economic average.
What is striking is the sector’s strong presence in rural areas: 54 per cent of foundry employees work there. In the overall economy, this share is only 33 per cent. Foundries therefore secure industrial employment, training and regional value creation in areas where large industrial employers are rare.
What the study shows for die casting
Light metal and non-ferrous metal foundries together account for 54 per cent of operating units, 48 per cent of employees and 47 per cent of the turnover of the German foundry industry. Despite significantly lower tonnage, their economic importance is therefore almost as great as that of iron casting. According to the study, light metal foundries alone account for 43 per cent of operating units, 36 per cent of employees, 38 per cent of turnover and 21 per cent of production volume. Around 20 per cent of total casting tonnage is attributable to aluminium foundries.
The study thus makes clear that industrial relevance in casting cannot be measured by weight and volume alone, but also by value creation, functionality and integration into customer industries. While the study does not provide separate figures for die casting, it explicitly names the process as part of the technological diversity of the foundry industry. At the same time, it points out that location-related and cost disadvantages become particularly apparent in high-volume markets. Large-scale die casting and automated sand casting are cited as examples.
Automotive industry and mechanical engineering are the most important customers
The sales structure shows how closely foundries are connected with key industrial sectors. Around 45 to 46 per cent of domestic deliveries go to the automotive industry. A further 29 to 30 per cent are attributable to mechanical engineering. Other customer sectors include the electrical industry, the manufacture of metal products, repair and installation of machinery and equipment, vehicle maintenance, other vehicle manufacturing and construction.
The authors of the study emphasise that the importance of the industry cannot be measured by production volumes alone. What matters is the function that cast components perform in customer industries. Many components are design-defining, functionally relevant or safety-critical – for example in powertrains, chassis, machinery, pumps, electric motors, transformers, plants or infrastructure components.
Sector under considerable location pressure
At the same time, the foundry industry is under pressure. The sector’s price- and seasonally adjusted production index is more than 35 per cent below the level seen at the beginning of 2018. This means that the decline is stronger than in energy-intensive industries overall.
According to the study, the factors weighing on the industry include weak development in important customer sectors, particularly vehicle manufacturing and mechanical engineering, structural changes in the automotive industry, high energy and labour costs, regulatory uncertainty, bureaucracy and growing import pressure. In some market segments, international overcapacities are also intensifying price and competitive pressure.
Foreign trade also points to a shift. Germany continues to export complex and higher-value cast products, while standardised and less complex products are increasingly being sourced from abroad. This means that the German foundry industry remains competitive in demanding segments but is losing ground.
The actual economic footprint is significantly larger
The direct economic indicators only provide an incomplete picture of the foundry industry’s importance to the economy. If indirect effects among suppliers and induced effects through consumer spending are included, a much larger economic footprint emerges.
According to IW Consult’s calculations, the sector directly, indirectly and inducedly accounts for around 125,000 jobs, EUR 10.3 billion in gross value added and EUR 26 billion in production value. For every direct job in a foundry, a further 0.85 jobs are created outside the sector. For every euro of direct value added, an additional EUR 1.10 of value added is generated in other areas of the economy.
Upstream sectors such as the manufacture of metal products, energy supply, wholesale, consulting, waste management, information services and the repair and installation of machinery and equipment all benefit.
