A report by the Monetary and Banking Research Institute (MBRI) showed a fifth consecutive decline in output of manufacturing companies listed in the stock market.
It reflected on the monthly performance of 280 companies in the Tehran Stock Exchange and Iran Fara Bourse, the junior equities exchange.
The companies account for almost half of industrial production in Iran and their performance is seen as an effective benchmark appraising production trends in the country, the MBRI said on its website.
Accordingly, the overall industrial production index (IPI) in the second calendar month to May 21 was down 0.2% from the corresponding month a year before – a decline for the fifth month in a row.
However, juxtaposing monthly data show that the downward trend was losing pace. The index recorded an annual decline of 5.8% in the preceding month ending April 21.
Also known as the industrial output index or industrial volume index, IPI is a business cycle indicator that measures monthly changes in price-adjusted output of industry at regular intervals, usually monthly.
A glance at sectoral indices show that the IPI jumped in auto and machinery sectors while petrochemical and food industries registered big declines.
The annual IPI for auto and spare part industries grew 7.9% in the month to May 21 while the sector reported 26.2% fall a month earlier.
Likewise, the machinery and equipment index improved over the previous month by 25.8% in the second calendar month, up on 15.3% a month before.
Basic metals, pharmaceuticals, electronics, tire and plastic and textiles were among industries that increased production in the month.
However, food industry output plunged 22.5% in the month after registering a 20.5% annual decline in the preceding month.
Annual output in the petrochemical sector improved but was still negative in the reviewed month -- annual IPI dropped 1.8%, improving over the annual 6% decline a month before.
Non-metallic minerals, petroleum products and paper products were other industries that recorded negative monthly output.
Inventories Down
The MBRI report showed an overall decline in the inventories of industries in the two months to May 21 implying that demand for goods of the said units was high.
Warehouse inventory is the collection of all materials and goods stored, whether for use to complete the production process or for sale to the customer.
Inventories rise if production is higher than sales in a particular period of time and vice versa.
Data showed the inventory index was positive for six consecutive months to March 20 before starting to fall in the two succeeding months ending on May 21.
Overall inventory index dropped 2.8% to the month and was down 1.9% in the three months ending May 21 but was up 0.5% on annualized basis.
The report provided a picture on profitability of the listed industries. Not all listed companies were homogenous.
As expected, auto and spare part companies were disappointing and atop the worst-performing industries.
Out of a total 35 companies in the key sector, 7 were loss-making in the first three quarters of the last fiscal year ending Dec.21.
In sum, there were a total of 56 loss-making companies in the first nine months of last year – up 17% on the corresponding period a year before.
