Industry Forecast by Joseph E. Fritz, Executive Director, Investment Casting Institute Overview
was the best of times, it was the worst of times…” In 2017, we saw recovery in a number of markets, most notably in oil and gas, which offered collateral benefits to parallel sectors. We also saw a downturn in IGT sales, a market that we had hoped would rebound. Interestingly enough, on comparison
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of the 2018 industry to 2017, another renowned British figure comes to mind. I am referring to Sir Isaac Newton, who in his First Law of Motion, states “An object at rest stays at rest and an object in motion stays in motion…” In other words, there has been little or no change to the industry trends in 2018 as compared to 2017.
Demand for both aerospace and
defense investment castings continue to exhibit strong growth, while demand for industrial gas turbine components are, for the most part, limited to the aftermarket. The demand for automotive castings is relatively flat, but at a high level, and most general industry sectors are exhibiting growth.
Aerospace and Defense Commercial aerospace continues to exhibit strong growth, and it has done so since 2003, with an 8% compounded annual growth rate (CAGR). For an industry which is typically considered to be cyclical, experiencing significant downturns occurring every eight years, the current 15 year run is unprecedented, and has been termed a “Super-Cycle”. This Super-Cycle would seem to have
no end, with OEMs boasting backlogs equivalent to 9 years’ production at current manufacturing levels, but there are signs of weakness in this bullish outlook. An obvious indicator is the industry’s current capacity constraints. Original 2018 Boeing and Airbus delivery forecasts reflected a 9.7% growth in in
16 ❘ January 2019 ®
n 2016, I likened the investment casting industry to Charles Dickens’ London, which he described as, “It
North America
Investment Casting 2018 Market Performance and 2019 Outlook
the commercial sector, but on review of 2018 industry performance through November YTD, shows growth deliveries occurring at half that rate. When addressed with the OEMs,
the manufacturers are quick to cite supply chain constraints, especially as they pertain to engines. For this reason, engine manufacturers are actively seeking to develop and qualify new casting sources, posing an opportunity for a number investment casters to enter
this production space. Discussions held with many North
American foundries supports this. With many operations running at or near capacity for the past two years, 2018 growth has been reported to be in the mid- single digits. Another constraint affecting industry growth is the labor force. With near record low unemployment rates, attracting and retaining good workers to the industry has become a great challenge. This is consistent with 2017
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