The Producer Price Index for the services sector reached an all-time high in the winter of last fiscal year (ended March 20, 2022).
The average Producer Price Index for the services sector in the four-quarter period ending March 20, which marks the end of the fourth quarter of the previous Iranian year, increased by 46.9% compared with the same period of the year before.
According to the Statistical Center of Iran, this marks the highest annual inflation since winter 2013 (the earliest available data on services producer inflation on SCI’s website).
PPI measures inflation from the perspective of costs to industrial or production sectors. Because it measures price changes before they reach consumers, some people see it as an earlier predictor of inflation than Consumer Price Index.
The overall PPI for the services sector stood at 423.4 in Q4 of the last fiscal year (Dec. 22-March 20), indicating a 7.3% increase compared with the preceding quarter.
The index indicates a 45.8% increase compared with the same quarter of the year before.
PPI measures price movements from the seller's point of view. Conversely, CPI measures cost changes from the viewpoint of the consumer. In other words, this index tracks changes to the cost of production.
The importance of PPI lies in its predictive content for the future pattern of CPI. Changes in PPI are usually reflected in CPI within a short period of time.
13 Subsectors
The services PPI is calculated based on the indexes of 13 subsectors, namely “water networks, wastewater management and wastewater treatment” with a coefficient of 1.2%, “repairing motor vehicles and motorcycles” with 2.8%, “transportation and warehouse services” with 23.2%, “services related to accommodation and food” with 4.8%, “information and communications” with 8.5%, “insurance services” with 1.7%, “real-estate services” with 26.8%, “professional, scientific and technical activities” with 3%, “administrative and support services” with 1.7%, “education” with 9.3%, “social services” with 14.2%, “art, entertainment and leisure” with 1.1% and “services categorized as others” with 1.8%.
For “water networks, wastewater management and wastewater treatment”, PPI stood at 219.5 in Q3, remaining unchanged compared with the previous quarter and up 32.4% compared with the same quarter of the year before. The average annual PPI for the subsector in the four-quarter period ending March 20 increased by 28.2%.
PPI for “repairing motor vehicles and motorcycles” stood at 681.6, indicating a 9.6% rise compared with the previous quarter and a 53.2% growth compared with the same quarter of the year before. The average PPI for the subsector in the four-quarter period ending March 20 surged by 60%.
The index for “transportation and warehouse services” stood at 491.3, posting a 7.6% rise quarter-on-quarter and a 47.3% rise year-on-year. The average annual PPI for the subsector in the four-quarter period jumped by 51.9%.
For “services related to accommodation and food”, PPI stood at 964, registering a 14% increase QOQ and an 81.5% increase YOY. The average annual PPI for the subsector in the four-quarter period increased by 84.3%.
For “information and communications”, it stood at 275.2, indicating a 7% rise compared with the previous quarter and a 26.1% increase compared with the same quarter of the year before. The average annual PPI for the subsector in the four-quarter period increased by 25.1%.
“Insurance services” saw the PPI stand at 254.2, registering a 2.3% rise QOQ and a 52.6% increase YOY. The average annual PPI for the subsector in the four-quarter period increased by 44.4%.
For “real-estate services”, the index was at 243.1, posting a 4.3% rise compared with the previous quarter and a 25.2% increase compared with the same quarter of the year before. The average annual PPI for the subsector in the four-quarter period increased by 24.9%.
“Professional, scientific and technical activities” had a PPI of 322.1, indicating a 3% rise over the preceding quarter and a 28.7% increase over the same quarter of the year before. The average annual PPI for the subsector in the four-quarter period increased by 33.9%.
The PPI measured for the subsector of “administrative and support services” stood at 750.8, showing a 7.5% growth compared with the previous quarter and a 50.1% increase over the same quarter of the year before. The average annual PPI for the subsector in the four-quarter period increased by 64.8%.
“Education” recorded a PPI of 354.3, indicating a 3.8% rise over the preceding quarter and a 36.1% increase over the same quarter of the year before. The average annual PPI for the subsector in the four-quarter period increased by 32.7%.
For “social services”, PPI stood at 553.3, indicating a 7.6% rise compared with the previous quarter and a 58.7% increase compared with the same quarter of the year before. The average annual PPI for the subsector in the four-quarter period increased by 57.9%.
“Art, entertainment and leisure” had a PPI of 447.7, indicating an 8.5% rise over the preceding quarter and a 49.3% increase over the same quarter of the year before. The average annual PPI for the subsector in the four-quarter period increased by 47.1%.
And, “services categorized as others” registered a PPI of 556.8, indicating an 8.4% rise over the preceding quarter and a 48.1% jump over the same quarter of the year before. The average annual PPI for the subsector in the four-quarter period increased by 51.6%.
