Industry Forecast by Joseph E. Fritz, Executive Director, Investment Casting Institute


erospace demand continues to be strong with build rates and castings sales increasing, while sales to the Industrial Gas Turbine sector for new turbine builds have declined, though the demand for spares has been constant.


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The market for automotive components continues to be strong but has not demonstrated significant movement from 2016. Oil & Gas exploration and production, which has been the focus of many due to its collateral effect on a number of industries, has in fact demonstrated a cautious recovery. Medical devices and implants continue to show consistent growth due to aging Baby Boomers.


Aerospace and Defense Commercial aerospace continues to demonstrate strong demand, fueled by ongoing fleet modernization, low fuel costs, low single-digit interest rates and continued growth in demand for both spare and new components. As of third quarter, monthly production rates at both Boeing and Airbus were up in comparison to 2016, 7% and 16% respectively. Delivery of fixed wing airframes in 2017 are expected to demonstrate approximately 11-12% growth over 2016 levels.


Deliveries continue to out pace


retirements at a rate of 2.5 to 1, resulting in worldwide fleet growth of 5.1% in 2017, which supports continued growth in the spares market.


Sales of rotary wing aircraft, which had previously been in decline due to the impact of the Oil & Gas industry, has in fact shown marginal growth in 2017. Deliveries, though still far from its recent 2015 peak, are expected to finish the year 5-6% above 2016 levels. Overall, North American Foundries


report 2016 growth ranging from 9% to over 20%, some citing a strong spares market while others are focused on new builds. Even in light of recent capacity the majority of North American aerospace


12 ❘ January 2018 ®


foundries are at or near capacity, and many are overbooked. Hence, capital investments in plant and equipment to support rising demand continues. In consideration of the foundries contacted in support of this analysis, their relative size and reported performance, the ICI estimates that 2017 North American commercial aerospace investment casting sales grew at an overall rate of 11%. The defense sector, though strong,


has not experienced any significant increases in spending since its sudden return to peak production in 2016. In fact, many program orders anticipated for 2017 had not materialized by the end of third quarter, resulting in an anticipated overall decline of 5-7% in defense casting sales for the year. Combining North


American


produced investment castings serving the global commercial aerospace and defense sectors together, results in an overall 2017 growth rate of 7% to $3.7 billion. Further growth is anticipate through 2018, and the sector is expected to surpass $3.9 billion in casting sales.


Industrial Gas Turbine Though 2016 saw signs of measurable growth in the Industrial Gas Turbine sector, 2017 gave up those gains and then some. Both GE and Siemens are experiencing difficulty in this sector and have undertaken measures to reduce cost, most notably GE’s 18% reduction in its Electrical Power division head count (12,000 jobs). Siemens has also undertaken


headcount reductions,


announcing in November that it would cut 6,900 jobs, mostly from its power division.


Competition from renewable


power has put a strain on the sector, and is expected to continue to do so through 2018. The only good thing to report in


this sector is the large installed base, accounting for a continued demand for spares. As a result, 2017 was flat in comparison to 2016.


The outlook for


2018 is a 1-2% decline in casting sales. Falling just below the $1 billion mark achieved last year.


Automotive With regard to the automotive sector, there has been little change, if any, from the same time last year. The North


North America


Investment Casting 2017 Market Performance and Outlook: North America


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