performance, but in sharp contrast to the immediate years prior, where double digit growth was the norm. On the defense front, the industry


continues to experience high demand for fighter jets and military transports, which comprise more than half of the military aviation casting sales. In this sector, we also consider non-aviation military components as well, such as military electronics housings, night vision goggles and other ancillary equipment. Foundries, although experiencing capacity constraints on engine components, report double digit growth on aluminum housings and structures. In consideration of the foundries


contacted for this analysis, their relative size and reported performance, the ICI estimates that 2018 North American aerospace investment casting sales grew at an overall rate of 4.5% to $3.90 Billion. Looking forward to 2019, the


current trends affecting aerospace investment castings is expected to continue at somewhat the same rate, with manufacturing capacity throttling growth. It isn’t until late 2020, or early 2021, that we expect to see a plateauing or short term decline in the commercial sector. This phenomenon will be the result of a decline in aircraft retirements in those years. Not only is the fleet’s average age growing younger each year, but the current installed technology has a longer lifespan than older technology, now nearly all retired. With fewer retirements occurring in 2021 and 2022, and fleet capacity supporting projected demand, a correction is expected.


Industrial Gas Turbine Last year saw the second successive year of significant declines in this sector, driven by prior years’ OEM stock piling in anticipation of unrealized market growth. Though demand for aftermarket components is strong, it was inadequate to offset market declines of $100 million in 2017 and $200 million in 2018. In fact, 2018 IGT casting sales reflected decline of more than 20%, ending the year at $700 million.


Automotive The North American automotive industry


®


had experienced unprecedented growth from 2009 to 2016, and has now, for the second consecutive year, been relatively flat or in moderate decline. The current plateau is at a high production level, and casters in this sector are enjoying consistently strong sales. The ICI estimates 2018 North


American production of castings for light vehicles to be $420 million, a 1% decline from 2017. For 2019, we need to consider a number of current factors: • We have seen fuel costs edging up, the availability of low-cost or free financing has become less prevalent and dealer incentives are becoming more difficult to come by.


• We continue to see growth in crossover and SUV sales, at the


expense of passenger car production. In fact, In November, GM announced the closure of several passenger car production facilities.


• There is an impact to vehicle pricing, a result of US Tariffs. Michael Robinet, IHS Markit’s Managing Director - Automotive Advisory Solutions, estimates there are 232 parts per vehicle subject to tariffs. As a result, an average US-made vehicle will experience an $1,800 cost increase. Taking these factors into


consideration, we anticipate further moderate decline in 2019 investment casting sales on the order of $10 million or 1.6%.


January 2019 ❘ 17


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