May 31

May 31 Iran PMI Report - Farvardin 1401 (March 21 - April 20)

PMI, 2022

New purchasing managers’ index (PMI) data from the Iran Chamber of Commerce showed that Iran’s economy contracted in the Iranian calendar month of Farvardin, which began on March 21. ___STEADY_PAYWALL___

Considering the extended Nowruz holidays, the economic slowdown was not unexpected. Still, whole economy PMI was several points lower than at the same point last year (37.49 vs. 39.65). Most businesses only traded for 15 days during the month of Farvardin.

The holiday period effected output, with the relevant whole economy sub-index falling to 28.52, one of the lowest levels in the past 24 months. After a brief boost in consumer demand in the run-up to the Nowruz holiday, the new orders sub-index also declined, falling to 29.34, the lowest level in two years. Iranian consumers may have saved-up to spend just before the holidays and their spending may now be further curtailed, diminishing sales prospects moving forward.

Rising producer prices also hit inventories, with the sub-index for raw materials and machinery inventories falling to a 17-month low at 41.64. The sub-index for the purchase price of raw materials and machinery jumped to 83.26, the highest level in six months.

The rising input costs may also be impacting export competitiveness of Iranian goods. The whole economy sub-index for exports sank to a 24-month low at 38.65.

Trends in the manufacturing sector were similar. Manufacturing PMI fell to a 24-month low at 37.02 as output fell. The manufacturing sub-index for output was 31.22, the lowest level in a year. Meanwhile, in a sign of fast-rising producer prices, the sub-index for the purchase price of raw materials and machinery rose to 84.55, the highest level in the last 18 months.

The outlook for businesses is turning more pessimistic as Iranian firms are exposed to rising prices in global markets, which may compound headwinds at home.