PMI Report - Farvardin 1399 (March 20 - April 19)
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Coronavirus Pushes Iran’s Economy into a Deeper Slump
The latest Purchasing Managers’ Index (PMI) data from the Iran Chamber of Commerce indicates that Whole Economy PMI has fallen to 28.68 in Farvardin (March 20-April 19)—the first month of Iranian calendar year of 1399—down from 31.39 in the preceding month.
A PMI above 50 indicates an expansion in economic activity.
The Iran Chamber of Commerce has been publishing Whole Economy PMI data for the last seven months. The sub-indices for sales, output, and new orders have dropped to the lowest level since the launch of the Whole Economy PMI report.
As a nation-wide lockdown shuttered retail businesses and as economic uncertainty reduced consumption, the sales sub-index, which includes both goods and services, declined to 17.17 in Farvardin 1399 (March 20-April 19), down from 29.17 in the preceding month. The sub-index for output dropped to 21.67 from 31.39. The sub-index for new orders fell to 21.45 from 47.60.
The new PMI figures mark the second consecutive month in which the contraction in economy activity has deepened. Data for the month of Bahman 1398 (January 21-February 19), the period just prior to the imposition of lockdown measures, shows Whole Economy PMI at 47.62.
With businesses reopening and government rolling out aid packages, Iranian businesses are hopeful that the overall economy is set to pick-up. The sub-index for expectations of economic activity in the coming month swung from 50.49 in Bahman 1398 (January 21-February 19) to just 23.82 in Esfand 1398 (February 20-March 19), before rebounding in Farvardin 1399 (March 20-April 19) to 50.49.
Iran’s severe coronavirus outbreak has derailed the country’s manufacturing sector, which had returned to robust expansion in recent months. In Farvardin 1399 (March 20-April 19), Manufacturing PMI fell to a record low of 28.06, down from 42.48 in the preceding month. Manufacturing PMI was 56.14 in Bahman 1398 (January 21-February 19).
Despite the impact of the COVID-19 outbreak, manufacturers expect activity to recover in the near term. The sub-index for “expectations of economic activity in the coming month” jumped to 69.11 from 27.52 in the preceding month.
Economists at the Iran Chamber of Commerce warn that because the sampling of the PMI survey is weighted towards Tehran, expectations for a quick rebound in economic activity may not be generalizable to the economy at large. Officials in Iran’s health ministry have warned of new outbreak clusters in several provinces around the country that could hamper efforts to ease the economy out of lockdown.
Whole Economy PMI
Manufacturing PMI
Photo: Abed Mirmasoumi
