Iran’s new PMI data for the fiscal month of Mordad (July 23 – August 22), released by the country’s Chamber of Commerce has given rise to concerns about a highly decreasing demand while the businesspersons are still hopeful that the situation will improve next month.
According to the new PMI reading, Iran’s monthly PMI of Mordad (48.06) reduced for a third consecutive month which indicates a recession in the month under review.
Except for suppliers’ delivery time and employment, all the other main sub-indexes were registered below the threshold (below 50).
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 “new orders” sub-index slashed to 42.33 from 47.14 in the previous month which registered a 13-month low. Analysts believe that the purchasers long wait for the revival of a 2015 nuclear deal between Iran and the world powers and the reducing purchasing power of the customers have led to a sharp fall in demand.
“Business activities” was another sub-index which dropped significantly in this month. The sub-index, which stood at 50.82 a month earlier, fell in this month to settle at 47.37.
The agricultural, industry and services sectors faced the most severe recession with electricity outages, summer holidays and reducing demand being the main factors affecting this recession.
The “raw material inventory” sub-index (44.38) is still facing a recession which has forced the index to its lowest in the past four months. Price fluctuations and severe shortages of liquidity have been the main factors contributing to the low raw material inventory.
The “employment” sub-index (57.16), however, registered its highest since the survey plan began nearly three years ago. Many companies are grappling with the shortage of workforce. Economic activists say that economic problems have made the workforce less willing to work in the factories and therefore they leave their works and the factories are forced to employ new ones.
The “price of goods and services” sub-index (51.96) has been slashed to its lowest in the past 28 months. It seems that reducing demand and liquidity have forced the producers to sell their products with the less possible profit despite the rising costs of raw materials and production inputs.
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INDEX
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Khordad1401
(May-Jun2022)
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Tir1401
(Jun-July2022)
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Mordad1401
(July-Aug2022)
|
|
PMI
|
54.73
|
50.10
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48.06
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business activities
|
59.50
|
50.82
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47.37
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|
new orders
|
51.90
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47.14
|
42.33
|
|
suppliers’ delivery time
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60.21
|
56.22
|
51.01
|
|
raw material inventory
|
47.72
|
45.91
|
44.38
|
|
employment
|
52.41
|
51.17
|
57.16
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|
raw materials price
|
86.70
|
74.36
|
67.97
|
|
finished goods inventory
|
53.42
|
57.10
|
55.47
|
|
exports of goods and services
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50.01
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46.96
|
48.26
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price of goods and services
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62.89
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62.27
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51.96
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consumption of energy carriers
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61.84
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56.53
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56.82
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sales of goods and services
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58.08
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46.32
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50.35
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expectations for next month economic activities
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50.54
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50.18
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63.72
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