Dec 14

Dec 14 Iran PMI Report - Aban 1401 (October 23 - November 21)

PMI, 2022

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.