Iran PMI Report - Dey 1401 (December 22 - January 20)
New purchasing managers’ index (PMI) data for the Iranian calendar month of Dey (December 22 – January 20) shows a sharp contraction in Iran’s economy, continuing the recent trend. Whole economy PMI plummeted to 41.89, down from 49.14 in the previous month. The new data published by the Iran Chamber of Commerce points to the worst contraction since the first edition of the whole economy PMI report in October 2019 (excluding seasonal declines in Farvardin of each year and the COVID-19 pandemic).
Iranian firms faced even higher production costs given high inflation, volatility in the foreign exchange market, and an energy crisis precipitated by intense winter weather. The whole economy subindex for the inventory of raw materials and machinery tanked to 39.54, its lowest rate over the past 27 months, excluding Farvardin of each year. The whole economy subindex for output fell to 39.48.
Firms are also getting squeezed on the demand-side. The new orders subindex dropped to 40.82, the lowest reading in the last 18 months excluding the new year’s period.
The Iranian economy is also shedding jobs. The whole economy subindex for employment dropped to 46.62, its lowest rate over the past 10 months.
The manufacturing sector has generally been the bright spot for Iran’s economy, but resilience in the sector is increasingly in doubt. Manufacturing PMI fell to 45.60, tipping into a deep contraction. The output subindex dropped to 39.63, its lowest rate over the past four years, excluding Farvardin of each year and the outset of the COVID-19 pandemic.
The Iran Chamber of Commerce attributed the poor performance of the sector on energy shortages, which led to factory shutdowns, as well as the still rising price of raw materials. Manufacturers are also facing weak demand. The new orders subindex dropped to 44.19.
The whole economy subindex for the expectation of economic activity in the coming month stood at 52.70, continuing a downward trend. A growing proportion of economic operators appear to believe that Iran’s economic challenges are set to continue.
Whole Economy PMI
Manufacturing PMI
Photo: Abed Mirmasoumi
Iran PMI Report - Azar 1401 (November 22 - December 21)
Iran’s economy contracted for the second month in a row according to new purchasing managers’ index (PMI) data for the Iranian calendar month of Azar (November 22 – December 21). Whole economy PMI rose to 49.15, but remained below the contraction threshold according to PMI data published by the Iran Chamber of Commerce.
The whole economy subindex for new orders improved slightly, rising to 48.47, but remained below 50 for the third month in a row, indicating that weak demand remains a drag on the economy. The small improvement in new orders pushed the output subindex to 50.51, just above the threshold.
Additional pressure rising from the continued devaluation of the rial was also reflected in the PMI report. The subindex for the inventory of raw materials and machinery plummeted to 46.41, falling sharply from 51.26 in the previous month. The subindex for the purchase price of raw materials and machinery surged to 85.25.
The continued economic disruptions are also having an impact on employment. Iran’s economy shed jobs at a faster rate in the month ending December 21. The employment subindex fell to 49.32, remaining below 50 for the second month in a row. The impact on employment is being felt most significantly in the services sector.
Iran’s manufacturing sector is performing better than the wider economy but continues to face headwinds. Manufacturing PMI stood at 51.69, marking a small decline from the previous month. Supply chain disruptions and high raw materials prices poses a challenge for output, which continued to grow, but at a slower rate. The subindex for the purchase price of raw material and machinery jumped to its highest rate over the past seven months and stood at 83.29. The manufacturing subindex for output stood at 53.22.
Manufacturing firms continued to struggle with soft demand and the new orders subindex remained below the threshold of 50 for the third month in a row, registering at 49.10.
As more time passes, Iranian manufacturers are becoming less optimistic. The economic headwinds may not be transitory. The subindex for the expectation of economic activity in the coming month plummeted to its lowest level over the past six months and stood at 58.84.
Business leaders have warned that they will be forced to hike prices soon as production overheads have increased significantly, adding to the inflationary outlook.
Whole Economy PMI
Manufacturing PMI
Photo: Abed Mirmasoumi
Iran PMI Report - Aban 1401 (October 23 - November 21)
Iran’s economy fell into contraction in the Iranian calendar month of Aban (October 23 – November 21), as the economic impact of ongoing protests and political turmoil was increasingly felt.
Whole economy PMI fell to 47.39, indicating that the economy is in contraction. Iran’s worse economic performance reflected the second straight month of weak demand. The whole economy subindex for new orders fell to 43.91, with the services sector most effected. The sales subindex likewise indicated contraction for the second consecutive month at 48.21.
In turn response to softening demand, businesses have been cutting back on output. The output subindex dropped to 46.24, its lowest non-holiday rate over the past 15 months. In light of the economic headwinds, companies are also shedding jobs. The employment subindex dropped to 48.88, its lowest rate over the past eight months.
Meanwhile, despite the economy cooling off, pressures continue to pose challenges. The whole economy subindex for the purchase price of raw materials and machinery surged to 78.49, its highest rate over the past five months.
The subindex for the expectation of economic activity in the coming month fell further to 52.62. While most businesses appear to think economic pressures will ease, confidence is diminishing.
Meanwhile, the manufacturing sector remained in expansion. Manufacturing PMI showed a small improvement, rising to 52.49. This indicates that the protest activity during the survey period had a negligible impact on industrial activities—strikes appear to have been small and sporadic.
The manufacturing subindex for output remained almost unchanged compared to a month earlier and stood at 54.10. The new orders subindex continued its decline and fell to 49.86.
Continued weakening on the real is putting pressure on raw materials and machinery inventories. The relevant subindex remained below 50 for the third consecutive month with a reading of 48.81.
The subindex for the purchase price of raw material and machinery jumped to its highest level over the past five months and reached 74.99.
As in the case of whole economy PMI, economic sentiments in the manufacturing sector are worsening, even if respondents to the PMI survey remain generally optimistic. The subindex for the expectation of economic activity in the coming month also dropped to its lowest rate over the past five months to reach 59.96.
Whole Economy PMI
Manufacturing PMI
Photo: Abed Mirmasoumi
Iran PMI Report - Mehr 1401 (September 23 - October 22)
Iran’s economy continued to grow in the Iranian calendar month of Mehr (September 23 – October 22), but growth slowed as new orders fell sharply following several weeks of national protests.
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New purchasing managers’ index data from the Iran Chamber of Commerce indicates that whole economy PMI fell to 50.19, down from 52.08 in the previous month. The slowdown in economic activity reflected a small drop in output. The whole economy sub-index for output was 51.60, down 0.74 points from the previous month. But the real impact on Iran’s economy came from the fall in new orders. The whole economy sub-index for new orders fell just over 6 points to 46.82.
Meanwhile, the sub-index for sales fell to 42.65, the lowest rate in 14 months. In it’s PMI report, the Iran Chamber of Commerce attributed to slowdown to the sharp drop in demand for goods and services and blamed the continued pressure on household purchasing power as well as “recent developments,” which refer to the ongoing protests triggered by the killing of Mahsa Amini.
The government has responded to the protests by curtailing interest access, which has also hurt sales activity in Iran’s large e-commerce sector.
Similar dynamics were observed in Iran’s manufacturing sector. Manufacturing PMI was 51.66, down 1.59 points from the previous month. Manufacturing output actually rose, indicating that planned strikes and other forms of labour protests have yet to impact production at Iranian factories. But new orders slowed significantly, with the relevant sub-index falling to 45.08, down 5.68 points from the previous month.
Business managers in the manufacturing sector appear to believe that the disruptions will be temporary—the sub-index for expectation of economic activity in the coming month was 60.39, well above the threshold of 50 that would indicate an expectation of contraction in the sector. Even so, business confidence appears shaken as the long-running pressures related to high producer prices are compounded by softening demand.
Whole Economy PMI
Manufacturing PMI
Photo: Abed Mirmasoumi
Iran PMI Report - Shahrivar 1401 (August 23 - September 22)
New purchasing managers’ index (PMI) data published by the Iran Chamber of Commerce for the Iranian calendar month of Shahrivar (August 23 – September 22) indicates that Iran’s economy grew at the fastest rate in three months. Whole economy PMI was 52.08, reflecting strength in manufacturing output.
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Following the end of summer, a period of seasonally slow demand, new order rose. The subindex for new orders jumped to 52.87, the highest rate for the past four months. New orders lifted the manufacturing, agriculture, and services sectors.
Raw materials inventory continued to be a weakness for the Iranian economy. The subindex for inventory of raw materials and machinery continued its decline, dropping to 45.22. Business insiders blamed a lack of liquidity and working capital.
Iran’s manufacturing sector continued to expand. Manufacturing PMI rose to 53.25. The output subindex surged to 55.74. The new orders subindex jumped to 50.76, indicating growing demand. However, demand appears softer that the seasonal norm.
Manufacturers are continuing to struggle with high producer prices. The manufacturing subindex for the inventory of raw materials and machinery rose a few points to 45.05, but continued to indicate that the shortage of raw materials was worsening. Furthermore, the subindex for purchase price of raw materials jumped to 62.80, signalling continued inflationary pressure.
Overall, the Iranian economy remains in a period of fragile recovery. But diminished purchasing power continues to hamper growth. At the end of Shahrivar, a new wave of national protests began, which can also be expected to depress the economic outlook.
Whole Economy PMI
Manufacturing PMI
Photo: Abed Mirmasoumi
Iran PMI Report - Ordibehesht 1401 (April 21 - May 21)
Iran’s economy rebounded to growth in the Iranian calendar month of Ordibehesht, which began on April 21. New purchasing managers’ index (PMI) data published by the Iran Chamber of Commerce points to a surge in demand and output—but the improved fortunes for Iranian firms appear temporary. ___STEADY_PAYWALL___
Whole economy PMI reached 56.17, the highest level over the past 32 months, as Iranian businesses returned to normal operations following the Nowruz holidays in March. The whole economy sub-index for output reached 61.37, its highest rate since the the index was launched 32 months ago. The jump in output was led by the manufacturing sector.
Higher output responded to a surge in demand. Rising inflation expectations spurred consumers and firms to buy goods before further price increases.
PMI data continued to show inflationary pressures. The whole economy sub-index for the purchase price of raw materials and machinery reached its highest rate over the past 19 months at 92.75. The sub-index for the retail price of goods and services also reached a 19-month peak at 70.05.
Business sentiments are turning more negative as prices continue to mount. The whole economy sub-index for the expectation of economic activity in the coming month dropped to 43.82. Businesses in the agriculture and services sectors expect their sectors to move towards contraction. According to the chamber, many businesses are struggling with surging production costs and state mandated price caps. Rising prices have also diminished the competitiveness of Iranian goods in export markets.
Meanwhile, manufacturing PMI rose to a two-year high at 63.21 on the back of strong output. The new orders sub-index also surged to a two-year high, reaching 64.88. But manufacturers expect demand to fall away as prices are adjusted to account for rising raw materials prices. Output will also face pressure as raw materials inventories fall—the relevant sub-index rose slightly to 47.95, but continued to indicate falling inventories.
Whole Economy PMI
Manufacturing PMI
Photo: Abed Mirmasoumi
Iran PMI Report - Farvardin 1401 (March 21 - April 20)
New purchasing managers’ index (PMI) data from the Iran Chamber of Commerce showed that Iran’s economy contracted in the Iranian calendar month of Farvardin, which began on March 21. ___STEADY_PAYWALL___
Considering the extended Nowruz holidays, the economic slowdown was not unexpected. Still, whole economy PMI was several points lower than at the same point last year (37.49 vs. 39.65). Most businesses only traded for 15 days during the month of Farvardin.
The holiday period effected output, with the relevant whole economy sub-index falling to 28.52, one of the lowest levels in the past 24 months. After a brief boost in consumer demand in the run-up to the Nowruz holiday, the new orders sub-index also declined, falling to 29.34, the lowest level in two years. Iranian consumers may have saved-up to spend just before the holidays and their spending may now be further curtailed, diminishing sales prospects moving forward.
Rising producer prices also hit inventories, with the sub-index for raw materials and machinery inventories falling to a 17-month low at 41.64. The sub-index for the purchase price of raw materials and machinery jumped to 83.26, the highest level in six months.
The rising input costs may also be impacting export competitiveness of Iranian goods. The whole economy sub-index for exports sank to a 24-month low at 38.65.
Trends in the manufacturing sector were similar. Manufacturing PMI fell to a 24-month low at 37.02 as output fell. The manufacturing sub-index for output was 31.22, the lowest level in a year. Meanwhile, in a sign of fast-rising producer prices, the sub-index for the purchase price of raw materials and machinery rose to 84.55, the highest level in the last 18 months.
The outlook for businesses is turning more pessimistic as Iranian firms are exposed to rising prices in global markets, which may compound headwinds at home.
Whole Economy PMI
Manufacturing PMI
Photo: Abed Mirmasoumi
Iran PMI Report - Esfand 1400 (February 20 - March 20)
Iran’s economy exhibited strong performance in the Iranian calendar month of Esfand (February 20 – March 20), but a long holiday period and continued uncertainty around the fate of the nuclear negotiations has dampened the economic outlook. ___STEADY_PAYWALL___
New purchasing managers’ index (PMI) data released by the Iran Chamber of Commerce showed the strongest economic performance in Iran in five months. Whole economy PMI reached 54.74.
The strong economic performance was underpinned by higher demand. The whole economy sub-index for new orders rose to 55.44, the highest rate in the past six months. Iranian producers and services firms had hoped that the Nowruz holiday would lead to a needed boost in consumer demand and raised output in turn. The whole economy sub-index for output reached 58.81.
Cost pressures are still being felt. The sub-index for the purchase price of raw materials and machinery reached 78.47, its highest rate over the past three months. Firms also cited an increase in minimum wage and rising food prices as a driver behind layoffs. The whole economy sub-index for employment fell to 44.82 percent, the lowest level in 17 months.
Similar dynamics could be seen in the manufacturing sector. Manufacturing PMI rose to 56.43, up nearly five points from the previous month. Strong demand was evident in new orders—the relevant sub-index rose to 59.92, the highest rate in 10 months. Relative stability in the foreign exchange market also gave an opportunity for manufacturers to replenish inventories. The sub-index for raw materials inventory rose to 51.60, indicating the first increase in inventories in two months.
On the other hand, the employment sub-index plummeted to its lowest rate over the past 23 months and dropped to 46.61. The chamber blamed the decline in employment on surging production costs.
Businesses expect a comedown as Iran enters a long holiday period that includes the Nowruz holidays and the holy month of Ramadan. The uncertain outcome of the Iran nuclear negotiations is also weighing on economic expectations. The whole economy sub-index for next month’s economic performance fell to 35.29, its lowest rate over the past two years. Looking to manufacturing PMI, the same sub-index fell to 34.80.
Whole Economy PMI
Manufacturing PMI
Photo: Abed Mirmasoumi
Iran PMI Report - Bahman 1400 (January 21 - February 19)
Optimism and Anticipation
Iranian businesses are gearing up for a seasonal boom as demand ramps up ahead of the Nowruz holidays. ___STEADY_PAYWALL___
According to Purchasing Manager’s Index (PMI) data published by the Iran Chamber of Commerce, whole economy PMI rose to 51.55, the highest reading over the past four months.
The whole economy sub-index for output bounced to 55.70, up more than 8 points from the previous month on the back of higher output from the services and agricultural sectors.
Even as firms anticipate more demand, the impact on new orders remained minimal in the Iranian calendar month of Bahman (January 21 - February 19). The whole economy sub-index for new orders rose to 47.90, up from 43.14 in the previous month.
Continued uncertainty over the future of the Iran nuclear deal and the impact on the FX market still posed headaches for Iranian firms. For the fifth consecutive month, the sub-index for raw materials inventory remained below 50 at 47.29. However, with inflation easing some improvements can be seen in producer prices. The sub-index for the purchase price of raw materials and machinery fell to its lowest rate over the past 13 months at 73.65. The decline suggests the prices are rising at a slower pace.
Meanwhile, manufacturing PMI stood at 51.50, extending the sector’s run of expansion to six months. But the sector continues to face headwinds.
The sub-index for output fell to 50.57, its lowest rate over the past five months. Soft demand is reflected in the sub-index for new orders, which remained in contraction for the second consecutive month with a reading of 48.83.
Furthermore, continued volatility in the FX market and lack of liquidity continued to impact supplies of raw materials. The sub-index for raw materials inventory stood at 48.86, up from 46.21 in the previous month.
But with the coming of the Persian new year, optimism appears in order. The whole economy sub-index for the expectation of economic activity in the coming month stood at 61.77—its highest reading over the past four months. The manufacturing sub-index for economic expectations was 61.41.
Whole Economy PMI
Manufacturing PMI
Photo: Abed Mirmasoumi
