PMI Report - Dey 1399 (December 21 - January 19)
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Iran’s Economy is Gearing-Up
While Iran’s manufacturing sector remain in contraction, new Purchasing Managers’ Index (PMI) data published by the Iran Chamber of Commerce points to Iran’s strongest overall economic performance in eight months. Whole Economy PMI rose 1.06 points from the previous month to reach 48.83 in the Iranian calendar month of Dey (December 21 - January 19).
While the economy remains in contraction, the sub-index for output exceeded 50 for only the third time in the 16 month period during which PMI data for the whole economy has been collected. The only previous months in which output was in expansion were the two months immediately following the beginning of the Iranian calendar year, when Iran was rebounding from the most acute point of the pandemic-induced economic crisis.
The Iran Chamber of Commerce also noted increased activity in the housing sector, in a sign that confidence is building in Iran’s economic recovery.
The Whole Economy sub-index for new orders showed a small decline, falling 0.12 points to 43.99. This may reflect some companies delaying purchases given expectations that Iran’s currency will appreciate in the coming months, leading to lower prices.
Meanwhile, in the manufacturing sector, PMI rose to half a point to 49.79—just shy of a return to expansion. The sector continued to be held back by weak demand, with the sub-index for new orders at 44.80. Output has fallen in line, with the sub-index dropping to 48.65 from 50.75 a month earlier.
With Iranian fiscal year coming to an end in March, manufacturers expect a surge in activity. Companies appear to be boosting staff in preparation. The sub-index for employment rose nearly 3 points to 53.94.
The sub-index for raw materials purchase price declined to 73.72, marking the fourth month of decline. This means that the prices of raw materials are increasing at a slower pace—a fact support by data on inflation.
In a sign of confidence, the Whole Economy economy sub-index for expectations of economic activity in the coming month surged to 60.95, its highest rate since the start of data collection. The same measure in the manufacturing PMI reached 64.74, the highest level in the past nine months. The Iran Chamber of Commerce notes, “Considering the outcome of the US election many businesses expect sanctions to be lifted.”
Whole Economy PMI
Manufacturing PMI
Photo: Abed Mirmasoumi
