Iran PMI Report - Dey 1400 (December 22 - January 20)
Holding Out for Spring
Iran’s economic growth slowed in the Iranian calendar month of Dey (December 22 – January 20) according to new purchasing managers’ index (PMI) data from the Iran Chamber of Commerce. ___STEADY_PAYWALL___
Whole economy PMI fell to 46.94—a reading below 50 indicates that the economy is in contraction. Weak demand and reduced output were behind the slowing economic performance. The whole economy sub-index for new orders fell to 43.14, the lowest reading in the last six months. The sub-index for output fell to 47.07 in turn. Weak demand has troubled Iran’s economy since the summer, but researchers at the Iran Chamber of Commerce point to recent exchange rate volatility as an exacerbating factor.
A volatile foreign exchange market has also increased pressure on raw materials inventories. The relevant sub-index fell to 43.14, its lowest rate in six months.
The more negative economic outlook has seen employers cut back on hiring, responding in part to increased fuel costs. The whole economy sub-index slipped below 50 to settle at 49.91.
The manufacturing sector, usually the bright spot in Iran’s economy, also saw worse performance as manufacturing PMI fell to 50.31 on the back of weak demand and reduced output. The sub-index for new orders fell to 44.90, while the sub-index for output fell to 50.54.
Still, the economic outlook remains positive, according to those surveyed by the Iran Chamber of Commerce. The whole economy sub-index for expectations of economic activity stood at 61.62. Iranian firms appear to be hoping that the lead-up to the Persian new year, typically a time of higher consumer expenditures, will boost their prospects.
Whole Economy PMI
Manufacturing PMI
Photo: Abed Mirmasoumi
Iran PMI Report - Azar 1400 (November 22 - December 21)
FX Market Headwinds
Volatility in Iran’s FX markets created headwinds for businesses in the Iranian calendar month of Azar (November 22 – December 21). Economic growth slowed according to the latest Purchasing Managers’ Index (PMI) data published by the Iran Chamber of Commerce. ___STEADY_PAYWALL___
During the month of Azar, whole economy PMI fell to 50.97. The sub-index for output fell 0.73 points to 53.13. The sub-index for new orders rose slightly to 48.00, up from 47.38 in the previous month. Still, with the PMI remaining below 50, demand for goods and services continued to contract for the second month in a row.
Across Iran’s economy, rising energy prices have created additional cost pressures for businesses. The sub-index for energy prices and consumption jumped to 67.88, its highest rate over the past 27 months. Businesses are being forced to react to weak demand and high production costs by curbing hiring—the employment sub-index dropped about 5 points to 48.74—and by opting not to increase prices to often rising production costs. The sub-index for the retail price of goods and services stood at 55.39, the lowest rate over the past 20 months.
The outlook in the manufacturing sector remained more positive than in other sectors of Iran’s economy. Manufacturing PMI fell 0.58 points but remained robust at 56.03. Notably, despite the FX volatility noted by the researchers at the Iran Chamber of Commerce, the sub-index for raw materials inventory rose above the threshold of 50 for the first time in seven months to reach 52.60.
The improvement in the availability of raw materials and other helped output remain robust, with the sub-index reaching 58.84, down less than half a point from the previous month. Orders continued to grow, but the sub-index dropped just over 4 points to reach 53.33, suggesting that weak demand continues to contribute to volatility in the sector’s economic performance.
Although businesses continue to believe economic conditions are set to improve, these factors are denting optimism about the business environment. The whole economy sub-index for the expectation future expectation of production and business activities fell to 56.03.
Whole Economy PMI
Manufacturing PMI
Photo: Abed Mirmasoumi
Iran PMI Report - Aban 1400 (October 23 - November 21)
A Bounce in Manufacturing
Iranian economic growth slowed in the the Iranian calendar month of Aban (October 23 – November 21) according to new purchasing managers’ index (PMI) data released by the Iran Chamber of Commerce. ___STEADY_PAYWALL___
Whole economy PMI fell 3.7 points from the previous month to reach 51.07. A bounce in manufacturing activity saved the economy from slipping back into contraction as businesses in the services, agriculture, and housing sectors continue to struggle in the face of weak demand. The whole economy sub-index for new orders fell to 47.38, the lowest level in three months.
Business also cited headwinds from higher prices. The whole economy sub-index for the purchase price of raw materials and machinery was 83.13. Meanwhile, the sub-index for raw materials investor fell to 44.62, the lowest rate in the past seven months. Higher production costs are contributing to higher prices for finished goods and services, which in turn are serving to depress demand.
The outlook in the manufacturing sector was slightly more positive as manufacturing PMI rose a significant 6.3 points to reach 57.11. The sub-index for output rose 7.9 points to reach 59.25 as demand for manufactured goods outpaced demand for services. The sub-index for new orders rose 12 points to 57.36. Factories added jobs to boost output and the sub-index for employment rose to 56.10, its highest level in six months.
Still, raw materials inventories continued to contract with the sub-index remaining below 50 at 47.75. Expensive foreign exchange rates and liquidity challenges are contributing to shortages and higher input prices. The sub-index for the purchase price of raw materials and machinery reached 85.12, its highest level over the past 13 months. With temperatures dropping in Iran, many manufacturers are beginning to struggle with higher energy prices.
Despite these headwinds, continued economic expansion remains the expectation among Iranian business leaders. The whole economy sub-index for expected economic activity remained strong at 59.74.
Whole Economy PMI
Manufacturing PMI
Photo: Abed Mirmasoumi
Iran PMI Report - Mehr 1400 (September 23 - October 22)
Growth That Isn’t Unbridled
Iran’s economy continued to grow during the Iranian calendar month of Mehr (23 September – 22 October), according to the latest release of purchasing manager’s index (PMI) data from the Iran Chamber of Commerce. ___STEADY_PAYWALL___
Whole economy PMI was 54.76, down slightly from the prior month’s reading of 55.55. Strong activity was seen in three sectors: services, agriculture, and construction. A drop in output in the manufacturing sector saw the whole economy output sub-index fall to 56.16, down from 57.64 in the prior month. Demand also softened as the sub-index for new orders fell to 55.16, down 2.3 points.
Raw materials prices continue to be a drag on growth, especially in the manufacturing and construction sectors. The sub-index for raw materials inventory dropped two points to slide back into contraction with a reading of 49.98.
The sub-index for employment fell to 47.84, the lowest level in 11 months, following seasonal changes in agriculture sector employment and a slowdown in job creation in the services sector.
The continued weakening in the rial contributed to an acceleration in the rise of producer prices. The sub-index for the purchase price of raw materials and machinery reached 83.52 during the month, its highest rate over the past year.
In the manufacturing sector, higher producer prices squeezed output while border closures hit export demand. As a result, manufacturing sector PMI fell to 50.83, down about 7 points, a significant drop. The output subindex fell to 51.31, down more than 10 points. The new orders fell compared to the previous month, with a sub-index reading of 45.22 compared to 58.93 in the prior month.
The exports sub-index reached its lowest level over the past six months at 43.57. The Iran Chamber of Commerce notes the impact of border closures between Iran and three of its neighbours, namely Afghanistan, Azerbaijan, and Armenia on export demand.
Persistent inflation continues to depress demand. The sales sub-index recorded a 12-point decrease and dropped to 46.53 during the month, a drop the Iran Chamber of Commerce attributes to “shrinking purchasing power.”
While high producer prices and constrained raw materials inventories have been constant challenge for Iranian manufacturers over the last three years, the impact of inflation on domestic demand appears to be a new hurdle for growth.
Whole Economy PMI
Manufacturing PMI
Photo: Abed Mirmasoumi
Iran PMI Report - Shahrivar 1400 (August 23 - September 22)
Strong One-Month Performance
Iran’s economy returned to growth in the Iranian calendar month of Shahrivar (August 23 – September 22) according to new purchasing managers’ index (PMI) data published by the Iran Chamber of Commerce. ___STEADY_PAYWALL___
Whole economy PMI rose 8.96 points to 55.55, a new record for the index which launched two years ago. The improvement in economic activity was driven by a rise in output. The whole economy sub-index for output rose to 57.64, up over 17 points from the previous month as the economy moves past the summer’s electricity blackouts and COVID-19 lockdowns.
However, businesses continue to face significant cost pressures related to soaring raw material prices. The sub-index for the purchase price of raw materials declined slightly, but remained above 80. The continued slide of the rial and its concurrence with a period of high global commodities prices pose a challenge. The price increased being passed on to consumers are continuing to depress demand, although sales did return to growth with the sub-index reaching 57.64, the highest level over the last 6 months.
The rebound in economic growth was driven by the manufacturing sector. Manufacturing PMI rose more than 12 points to 57.66 as the sector returned to expansion. The output sub-index for the sector reached 61.96 while the new orders sub-index rose to 58.93, the highest rates recorded over the past four months.
Still, companies face supply chain bottlenecks. While the sub-index for raw materials inventories rose to 48.75 from 42.18 in the previous month, it remained below the crucial level of 50. The business climate remains challenging. Manufacturers reported concerns over export volumes as cost pressures and related price increases reduce the competitiveness of Iranian goods in international markets.
Whole Economy PMI
Manufacturing PMI
Photo: Abed Mirmasoumi
Iran PMI Report - Mordad 1400 (July 23 - August 22)
A Summer to Forget
Iran’s economy edged back towards growth in the calendar month of Mordad (July 23 – August 22), according to new purchasing managers’ index (PMI) data published by the Iran Chamber of Commerce.
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Whole economy PMI rose to 46.59 from 44.64 in the previous month. But the outlook for the economy remained negative. Output fell sharply, with the sub-index falling to 40.41, an unusually low level for this time of year, despite summer holidays. Shutdowns related to COVID-19 were cited as a cause for the reduced output. Demand also remains weak with the sub-index for new orders registering a small increase to 43.89. Demand has been hit by continued economic uncertainty as the Raisi administration has yet to assert itself in economic planning. This uncertainty is reflected in part in the recent weakening of the rial.
The manufacturing sector, long the resource of Iran’s economic resilience, also struggled. Manufacturing PMI recorded a slight increase to 45.24. Again, declining output explains the sector’s poor performance. A combination of summer holidays at major factories and the COVID-19 related business shutdowns led hit production. Increased volatility in foreign exchange markets has led to cost pressures and constrained supply of raw materials. The sub-index for raw materials inventory fell to 42.18, the lowest level in the past 10 months. The sub-index for purchase price of raw materials and machinery jumped to 82.53 while the sub-index for the price of finished goods reached 60.01—the highest rates over the past four months.
However, respondents to the Iran Chamber of Commerce’s survey believe that the worst may be over. The sub-index for the expectations of economic activity in the coming month reached 65.98, the highest level so far this summer.
Whole Economy PMI
Manufacturing PMI
Photo: Abed Mirmasoumi
Iran PMI Report - Tir 1400 (June 22 - July 22)
Blackouts Compounded by COVID-19
The latest Purchasing Managers’ Index (PMI) report published by the Iran Chamber of Commerce, covering the Iranian calendar month of Tir (June 22 – July 22), made clear the economic consequences of continued blackouts in Iran and a rising fifth wave of COVID-19 cases.
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Whole economy PMI fell to 44.62 from 51.27 in the prior month, meaning that the Iranian economy has returned to contraction, ending a 5 month period of growth.
The Iran Chamber of Commerce described the decline as a “sharp fall,” and pointed to COVID-19 related restrictions, recurring blackouts, returning weakness in Iran’s currency, and political uncertainty following the outcome of the Iranian presidential election. The whole economy sub-index fell to 44.93 in the face of reduced demand for goods and services. The new orders sub-index plummeted to 33.98, the second lowest rate recorded since the inception of the whole economy PMI reports.
The weakening of the Iranian rial over the month pushed the sub-index for the price of raw materials and machinery to 84.02, the highest figure in nine months.
One of the few bright spots was in the sub-index for employment, which saw a small increase to 54.87, as jobs continued to be added in the services and agricultural sectors.
Manufacturing PMI fell to 43.19, down from 54.21 in the previous month. The outlook for output, new orders, and raw materials inventories turned negative. Most concerning for the wider economy, the employment sub-index dropped to 47.86, breaking a 15-month streak during which the manufacturing sector added jobs.
While power outages had become less frequent, the COVID-19 caseload continued to mount towards the end of Tir. With a lockdown now in force, the outlook for Iran’s economy will remain negative for the near-term unless the government manages to reinstate the stability that had enabled Iran’s economic recovery in the first half of the year.
Whole Economy PMI
Manufacturing PMI
Photo: Abed Mirmasoumi
Iran PMI Report - Khordad 1400 (May 22 - June 21)
Blackouts Hamper Growth
Recurring blackouts and constraints in the supply of raw materials hampered business activity in Iran during the calendar month of Khordad (May 22 - June 21), according purchasing managers’ index (PMI) data released by the Iran Chamber of Commerce.
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Given new headwinds, whole economy PMI fell to 51.27 from 53.78 in the previous month. While the economy is still growing, the PMI data indicates a fall in new orders, continued increases in the price of raw materials, and a drop in output likely related to recurring power cuts have hampered economic activity. The whole economy sub-index for output fell by over 6 points to 52.64. The whole economy sub-index for raw materials inventory fell to 45.73, its lowest rate in the past seven months.
While remaining in a growth phase, the manufacturing sector likewise saw a steep fall in economic activity. Manufacturing sector PMI fell nearly 9 points to 54.21. The sub-index for output fell to 53.64 from 68.68 in the previous month. Researchers at the Iran Chamber of Commerce blame the power cuts for interrupting output at manufacturing facilities.
The raw materials and machinery inventory sub-index declined to 47.52 from 53.59 a month earlier. Researchers at the Iran Chamber of Commerce cited import bottlenecks and an increase in the price of hard currency in Iran’s FX market as sources of pressure on raw materials inventories.
Despite the blackouts and supply constraints, businesses remain optimistic about the state of the economy. The whole economy sub-index for expectations of economic activity reached 63.78. Optimism is also reflected in the employment-related data. For the seventh straight month, the Iran’s manufacturing sector added jobs, with the employment sub-index at 55.93.
Whether this optimism is warranted depends on an end to the blackouts and no further deterioration in the availability and price of raw materials.
Whole Economy PMI
Manufacturing PMI
Photo: Abed Mirmasoumi
Iran PMI Report - Ordibehesht 1400 (April 21 - May 21)
Clouds on the Horizon
Iran’s business climate continued to show sings of recovery during the calendar month of Ordibehesht (April 21 – May 21) according to Purchasing Managers’ Index (PMI) data published by the Iran Chamber of Commerce.
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Following the slowdown in the Iranian calendar month of Farvardin (March 21 – April 20), during which Whole Economy PMI fell to 39.65 due to the Nowruz holidays and lingering impact of COVID-19, the index reached 53.84 in Ordibehesht, the second highest level since the Iran Chamber of Commerce began tracking Whole Economy PMI. The sub-index for output reached 58.64, the highest level to date.
However, the sub-index for new orders declined to 49.80 in a sign of uncertainty around the impact of Iran’s presidential election, the fate of the nuclear negotiations, and the continued stability of Iran’s currency. The sub-index for raw materials prices was 76.25, indicating that production costs continue to rise. The sub-index for raw materials and machinery inventory stood at 49.49, registering a slight decline compared to the prior month. High production costs and continued inflation will continue to erode demand, which could slow the economic recovery in the coming months.
Strong performance in the manufacturing sector saw the whole economy sub-index for employment rise to 52.05, the highest level on record. Manufacturing PMI jumped to 63.00 while the new orders sub-index for the manufacturing sector rose to 61.81.
The sub-index for raw materials and machinery inventory reached 53.59, the highest rate recorded since the PMI report was first issued 32 months ago. The manufacturing sector continues to add jobs, with the sub-index for employment reaching 59.66.
At the time of the survey, manufactures were optimistic about further improvements in the business climate. The sub-index for expectations of economic activity was a healthy 60.66.
But the recently slowdown in the Vienna negotiations and the difficulties with electricity supply that have led to significant blackouts in Iran where highlighted as future risks by researchers at the Iran Chamber of Commerce which will likely be reflected in the forthcoming PMI data.
Whole Economy PMI
Manufacturing PMI
Photo: Abed Mirmasoumi
PMI Report - Esfand 1399 (February 19 - March 20)
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Ending the Year on a High
The Iranian economy ended the year 1399 on a high according to Purchasing Managers’ Index (PMI) data published by the Iran Chamber of Commerce. Whole Economy PMI reached 54.73 while the sub-index for output rose to 58.39, the highest level registered to date.
The strong economic performance is related to higher consumer demand in the lead-up to the Nowruz holiday. The sub-index for sales jumped nearly 7 points to 60.30.
Manufacturing activity was also strong with Manufacturing PMI rising to 57.29 despite a small drop in output. The sub-index for output fell to 56.15 from 59.58 in the prior month. Manufacturers face continued challenges in managing inventories. The sub-index for raw materials and machinery inventory dropped to 49.42. Last month, the sub-index had surpassed the threshold of 50 for the first time in 29 months. The sub-index for raw materials purchases price also rose to 79.98.
Manufacturers are preparing for the seasonal lull in activity as the country moves into the long Norwuz holiday. The sub-index for expectations of economic activity in the coming month was 44.57. A continued rise in COVID-19 cases and the start of the Ramadan period are also expected to depress economic activity.
Whole Economy PMI
Manufacturing PMI
Photo: Abed Mirmasoumi
PMI Report - Bahman 1399 (January 20 - February 18)
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A Turning Point for Iran’s Economy?
Iran’s economy has returned to growth according to the latest Purchasing Managers’ Index data published by the Iran chamber of commerce. Whole Economy PMI reached 53.73 during the Iranian calendar month of Bahman (January 20 – February 18) — the highest level since the index was launched 17 months ago.
Output surged as the country gears up for the Nowruz holiday—a period of the year when consumption typically increases. The Whole Economy PMI sub-index for output reached 56.71—another record high for the index. Output rose across records, including, agriculture, services, industries, and housing.
But growing demand was not limited to domestic buyers. The Whole Economy sub-index for exports rose to 47.56, a significant increase from 43.46 in the prior month. This has been attributed to an increase in the export of manufactured goods. Customs data indicates that exports rose $184 million over the previous month’s total.
Looking to the economy at large, raw materials inventories continue to be the primary drag on growth. The relevant sub-index marked a small decline to reach 48.26 while the sub-index for raw material purchase prices rose to 79.92.
But in the manufacturing sector, a more positive outcome was registered. The Manufacturing PMI sub-index for raw materials inventory exceeded 50 for the first time since the index was launched 29 months ago. Manufacturers continue to face challenges in this area, but the small reprieve over the last few months has helped push the sector back into growth. Manufacturing PMI reached reached 58.34, its highest rate over the past nine months.
Growing demand at home and increased exports point to better prospects for Iran’s factories. New orders poured in during the Iranian calendar month of Bahman. The sub-index for new orders reached 60.03. The Iran Chamber of Commerce attributes this result to increased demand related to the Nowruz holiday, but also the diminishing impact of COVID-19 and its related restrictions on Iran’s economy.
The Manufacturing PMI sub-index for exports exceeded 50 for the first in 29 months, pointing to the positive dynamics for those Iranian manufacturers that have been able to maintain cost-efficient supply chains while taking advantage of Iran’s devalued currency to offer their products at competitive prices to foreign buyers.
Iranian economic actors are moving into the new year with greater confidence. The Whole Economy PMI sub-index for expectations of economy activity was 58.92, indicating that business expect the favourable conditions to persist.
Whole Economy PMI
Manufacturing PMI
Photo: Abed Mirmasoumi
PMI Report - Dey 1399 (December 21 - January 19)
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Iran’s Economy is Gearing-Up
While Iran’s manufacturing sector remain in contraction, new Purchasing Managers’ Index (PMI) data published by the Iran Chamber of Commerce points to Iran’s strongest overall economic performance in eight months. Whole Economy PMI rose 1.06 points from the previous month to reach 48.83 in the Iranian calendar month of Dey (December 21 - January 19).
While the economy remains in contraction, the sub-index for output exceeded 50 for only the third time in the 16 month period during which PMI data for the whole economy has been collected. The only previous months in which output was in expansion were the two months immediately following the beginning of the Iranian calendar year, when Iran was rebounding from the most acute point of the pandemic-induced economic crisis.
The Iran Chamber of Commerce also noted increased activity in the housing sector, in a sign that confidence is building in Iran’s economic recovery.
The Whole Economy sub-index for new orders showed a small decline, falling 0.12 points to 43.99. This may reflect some companies delaying purchases given expectations that Iran’s currency will appreciate in the coming months, leading to lower prices.
Meanwhile, in the manufacturing sector, PMI rose to half a point to 49.79—just shy of a return to expansion. The sector continued to be held back by weak demand, with the sub-index for new orders at 44.80. Output has fallen in line, with the sub-index dropping to 48.65 from 50.75 a month earlier.
With Iranian fiscal year coming to an end in March, manufacturers expect a surge in activity. Companies appear to be boosting staff in preparation. The sub-index for employment rose nearly 3 points to 53.94.
The sub-index for raw materials purchase price declined to 73.72, marking the fourth month of decline. This means that the prices of raw materials are increasing at a slower pace—a fact support by data on inflation.
In a sign of confidence, the Whole Economy economy sub-index for expectations of economic activity in the coming month surged to 60.95, its highest rate since the start of data collection. The same measure in the manufacturing PMI reached 64.74, the highest level in the past nine months. The Iran Chamber of Commerce notes, “Considering the outcome of the US election many businesses expect sanctions to be lifted.”
Whole Economy PMI
Manufacturing PMI
Photo: Abed Mirmasoumi
