Iran’s overall Purchasing Managers’ Index (PMI) fell sharply in the calendar month to mid-January, hitting its lowest level in seven months as a surge in the exchange rate and widespread internet outages weighed on economic activity, a report by the research arm of Iran’s Chamber of Commerce showed.
According to the report, the seasonally adjusted PMI for the whole economy stood at 43.4 in the Iranian month of Dey, remaining well below the 50 mark that separates expansion from contraction and marking its weakest reading since June.
The decline was driven in part by a steep rise in the exchange rate following the government’s decision to move to a single exchange rate system, as well as internet disruptions during nationwide protests.
The index measuring output of goods and services dropped to a five-month low and remained below the neutral threshold for the 22nd consecutive month. New orders fell even more sharply, registering their lowest level in 70 months, last seen in April 2019, reflecting weak demand across sectors.
Employment conditions also deteriorated, with the hiring index falling to a three-month low and staying in contraction territory for an eighth straight month. At the same time, cost pressures intensified, as the index for prices of raw materials and purchased inputs climbed to its highest level in 44 months, the strongest since mid-2022.
Prices charged for finished goods and services also rose, reaching their highest level in 33 months.