PMI Report - Mordad 1399 (July 22 - August 21)
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High Prices and Weak Demand See Blip in Manufacturing-Led Recovery
Continued shortages of raw materials and depressed consumer demand led to a continuation of Iran’s economic contraction in the month of Iranian calendar month of Mordad 1399 (July 22 – August 21).
The latest Purchasing Managers’ Index (PMI) report prepared by the Iran Chamber of Commerce shows Whole Economy PMI rising 0.96 points to reach 46.43.
There are signs that the supply bottlenecks may be easing. The Whole Economy sub-index for raw materials inventory rose from 35.29 to 40.24. However, even as raw materials and inputs are proving easier to source, prices remain high. The comibination of high prices and weak demand have led new orders to fall to their lowest level in four months, with the Whole Economy sub-index falling from 44.39 to 41.53.
Despite the small improvement in the state of the overall economy, Iranian manufactures continue to face headwinds, with the sector slipping into contraction for the first time since April. Manufacturing PMI fell sharply from 55.25 to 48.06.
Part of this decline can be explained by the summer holidays imposed by many manufactures, such as the 10-day pause in production at Iran Khodro and SAIPA, the country’s two largest automakers. But it also reflects the impact of weak demand and high prices. The Manufacturing PMI sub-index for new orders plunged to 44.23 from 58.85 a month earlier.
However, manufacturers appear optimistic that the month of Mordad was a temporary blip in sector’s recovery. The Manufacturing PMI sub-index measuring expectations of economic output in the coming month rose from 51.37 to 58.62.
Whole Economy PMI
Manufacturing PMI
Photo: Abed Mirmasoumi
