Iran’s new PMI data for the fiscal month of Azar (November 22 – December 21), released by the country’s Chamber of Commerce indicates that the economic operators are concerned about the fluctuations of the foreign currency rate and severe lack of liquidity in production sector.
The Purchasing Managers’ Index, known by its Farsi acronym Shamekh, for Iran’s overall economy has fallen very slightly (0.1) from 51.07 in the previous month to settle at 50.97 in Azar.
The Statistics and Economic Analysis Center of Iran Chamber of Commerce, Industries, Mines and Agriculture, the sponsor and coordinator of the survey, announces the whole economy PMI data in a report every month.
The headline PMI is a number from 0 to 100, such that over 50 shows an expansion of the economy when compared with the previous month. A PMI reading under 50 indicates contraction and a reading of 50 implies no change.
PMI is an index of the prevailing direction of economic trends, aiming to provide information about business conditions to company directors, analysts and purchasing managers.
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The survey in Azar indicated that the PMI in this month was the lowest over the past four months. Businesspersons believe that companies have been facing liquidity shortages and few orders due to declining customer purchasing power in the month.
Recession in construction, services and agriculture sectors was the main contributor to the low PMI reading in Azar.
The “business activities” sub-index in Azar (53.13) has registered the lowest growth in the past four months. This sub-index faced sharp recession in construction sector due to seasonal effects on this business.
The “new order” sub-index (48.0) has also dropped but with a lower slope compared with the preceding month. Apart from the seasonal recession of the construction sector, the services sector has also been facing a fall in new orders as a result of growing prices and severe shortage of liquidity.
The "raw material inventory" sub-index (46.49) in Azar, also gained slightly from 44.49 in the last month.
The PMI reading of “employment” fell to 48.74 from last month’s 53.72. The sub-index showed more reduction in services, agriculture and construction sectors due mainly to an increase in the costs of the businesses.