Jul 4

Jul 4 Iran PMI Report - Ordibehesht 1401 (April 21 - May 21)

PMI, 2022

Iran’s economy rebounded to growth in the Iranian calendar month of Ordibehesht, which began on April 21. New purchasing managers’ index (PMI) data published by the Iran Chamber of Commerce points to a surge in demand and output—but the improved fortunes for Iranian firms appear temporary. ___STEADY_PAYWALL___

Whole economy PMI reached 56.17, the highest level over the past 32 months, as Iranian businesses returned to normal operations following the Nowruz holidays in March. The whole economy sub-index for output reached 61.37, its highest rate since the the index was launched 32 months ago. The jump in output was led by the manufacturing sector.

Higher output responded to a surge in demand. Rising inflation expectations spurred consumers and firms to buy goods before further price increases.

PMI data continued to show inflationary pressures. The whole economy sub-index for the purchase price of raw materials and machinery reached its highest rate over the past 19 months at 92.75. The sub-index for the retail price of goods and services also reached a 19-month peak at 70.05.

Business sentiments are turning more negative as prices continue to mount. The whole economy sub-index for the expectation of economic activity in the coming month dropped to 43.82. Businesses in the agriculture and services sectors expect their sectors to move towards contraction. According to the chamber, many businesses are struggling with surging production costs and state mandated price caps. Rising prices have also diminished the competitiveness of Iranian goods in export markets.

Meanwhile, manufacturing PMI rose to a two-year high at 63.21 on the back of strong output. The new orders sub-index also surged to a two-year high, reaching 64.88. But manufacturers expect demand to fall away as prices are adjusted to account for rising raw materials prices. Output will also face pressure as raw materials inventories fall—the relevant sub-index rose slightly to 47.95, but continued to indicate falling inventories.