Iran Chamber of Commerce, Industries, Mines, and Agriculture (ICCIMA) has released the country’s new PMI data for the fiscal month of Azar (November 21 – December 20, 2024), which has registered one of its lowest since the survey began 63 months ago.
The seasonally adjusted PMI was reported at 45.5, below the 50 mark that separates growth from contraction. The figure stood at 43.9 before the application of seasonal adjustment.
Seasonal adjustment, or deseasonalization, is a statistical method used to remove the seasonal component from a time series, allowing for the independent analysis of trends and cyclical deviations. After preparing dozens of PMI (Purchasing Managers' Index) reports, the Research Center of Iran Chamber of Commerce, Industries, Mines, and Agriculture has now identified the seasonal components of these time series and prioritized seasonal adjustment in its monthly PMI reports.
The decline in the monthly PMI is mainly attributed to industrial power cuts which has been hindering the production sector during the month under review.
Increasing rate of foreign currency has also led to a surge in the costs of raw materials needed by manufacturers, with the fall in domestic demand being another cause of the declining PMI.
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 “business activities” sub-index was reported at 46.2, registering a four-month low. With widespread power outages and foreign exchange fluctuations, the business activities are on a downward trajectory once again.
Increasing foreign exchange rate, inflation, and falling purchasing power of customers have caused a decline in demand for goods and services, so that the “new orders” sub-index was reported at 41.8, its lowest in five months.
The “suppliers’ delivery time” sub-index (48.8) posted a nearly two-year low. At a time that the companies were semi-closed due to energy shortages and as they face decreased financial resources, the supply of raw materials have also been hindered, slowing the business processes.
The “employment” sub-index (47.8) was also registered below the threshold (below 50) for a second month in a row.
The “raw material inventory” declined to its lowest in 22 months to settle at 45.5 in the month under review. Increasing foreign exchange rates and shortage of liquidity have caused businesses to face difficulty in supplying their needed raw material, with the process of placing orders and allocating foreign exchange being still too time-consuming.
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INDEX
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Mehr1403 (Sep-Oct2024)
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Aban1403 (Oct-Nov2024)
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Azar1403 (Nov-Dec2024)
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PMI (seasonally adjusted)
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50.2
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51.4
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45.5
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business activities
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52.0
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51.5
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46.2
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new orders
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47.7
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52.0
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41.8
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suppliers’ delivery time
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49.2
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55.5
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48.8
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raw material inventory
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47.3
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50.0
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45.5
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employment
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54.1
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48.2
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47.8
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raw materials price
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75.9
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82.2
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83.9
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finished goods inventory
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48.8
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48.1
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43.0
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exports of goods and services
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53.2
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47.9
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46.4
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price of goods and services
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61.1
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61.4
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61.5
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consumption of energy carriers
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54.4
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53.4
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43.4
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sales of goods and services
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54.8
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51.1
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47.6
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expectations for next month economic activities
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56.3
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58.6
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47.7
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