The industrial production index (IPI) improved in the third calendar month to June 21, bucking a five-month declining trend.
According to a report by the Monetary and Banking Research Institute (MBRI), the overall IPI in the month rose 2.5% on the corresponding month a year ago.
The report said industrial output in the month increased after five consecutive declines. The index recovered in June after an annual decline of -0.2% in the preceding month and down 5.8% in the a month before (ending April 21)
It covered the monthly performance of 280 companies in Tehran Stock Exchange and Iran Fara Bourse, the junior equities exchange.
The companies account for more than half the industrial production in Iran and their performance is seen as a benchmark for appraising the domestic production cycle, the MBRI said in the report on its website.
Rise in overall IPI is largely owed to the increase in the output of auto companies and partly to higher chemical and base metal production.
A sector–by-sector analysis shows the rise in auto and spare parts index and decline of non-metallic minerals, pharmaceuticals and electronic industries.
The annual IPI for auto and spare part industries jumped 18% in the month after the sector reported 7.3% rise a month before.
In addition, the chemical industries index improved on the previous month climbing 1.9% in the third calendar month, rising from -1.9% a month before.
Basic metals, tire and plastic, petroleum products and textiles were among industries with higher production.
Despite a 15.6% decline, the food industries index improved slightly from -19.8% fall the month before.
On the flip side, non-metallic minerals output declined 9% after falling 2.3% annually in the preceding month.
Petroleum products, electronic equipment and paper products were among sectors with negative output.
Inventories
The MBRI reported a general decline in the warehouses of reviewed industries in the three months ending June 21, indicating that demand was higher than production.
Warehouse stock or stock inventory is the collection of all materials and goods stored, whether for use to complete the production process or for sale to the customer.
The stock inventory rises if production is higher than sales in a particular period of time and vice versa.
Data showed that the inventory index was positive for six consecutive months to March 20 before declining in the next three months.
The overall stock inventory index dropped 5.8%. This index was down 4.2% in the three months to June 21 and 0.1% lower annually.
Profitability of the listed industries was also in the MBRI review. Based on the financial statements of companies in the twelve months ending in the last fiscal year (March, 34 companies were in the red last year.
The auto and spare part makers, despite higher output, were disappointing and atop the worst-performing industries. Overall loss incurred by companies in this sector was 30% over and above on the previous year.
It is worthy of mention that the domestic auto industry, plagued by gross mismanagement and absence of transparency, has been sinking in an ocean of red for decades.
And this is despite regular infusions of cash and bailouts by successive governments, namely for the two main carmakers, Iran Khodro and Saipa.
Likewise, the quality of domestically-produced autos has shockingly declined and prices have jumped several hundred percent in the past few years.
