Dec 7

Dec 7 Iran PMI Report - Aban 1400 (October 23 - November 21)

PMI, 2021

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.