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
