The Purchasing Managers' Index for the industrial sector during the 11th month of the current fiscal year (Jan. 21-Feb. 19) settled at 56.14 from 51.92 in the preceding month, indicating a 4.22-point or 8.1% increase month-on-month.
It is 17 months now that the Statistics and Economic Analysis Center of the Iran Chamber of Commerce, Industries, Mines and Agriculture is publishing reports on PMI of the country’s industrial sector.
The industrial PMI is based on a monthly survey sent to senior executives of more than 400 companies. It is based on five major survey areas: new orders (30%), raw material inventory levels (10%), production (25%), supplier deliveries (15%) and employment (20%).
The surveys include 12 questions about business conditions and any changes, whether it is improving, no changes or deteriorating.
The textile industry posted the highest PMI with a reading of 69.5 during the month under review, while industries categorized as “others” registered the lowest PMI reading with 31.5.
The headline PMI is a number from 0 to 100, such that over 50 represents an expansion 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 decision-makers, analysts and purchasing managers.
Five Main Sub-Indices
The Production sub-index for Iran’s industrial sector decreased from 59.56 in the ninth month (Nov. 22-Dec. 21, 2019) to 51.27 in the 10th month (Dec. 22, 2019-Jan. 20) but rebounded to 55.35 in the 11th month (Jan. 21-Feb. 19).
Industries categorized as “others” recorded the lowest PMI of the production sub-index last month with a reading of 20 while clothing and leather had the highest PMI with a reading of 73.1.
The new orders sub-index declined from 55.89 in the ninth month to 50.49 in the 10th month but climbed to 60.12 in the 11th month with the top performing industry for the 11th fiscal month being textile (83.3).
The supplier deliveries sub-index decreased from 62.33 in the ninth month to 57.26 in the 10th month, but increased to 62.15 in the 11th month.
The highest supplier deliveries PMI was posted by textile industry with a reading of 76.7 and the lowest was recorded for industries classified as “others” with a reading of 50.
The raw materials inventory levels sub-index declined from 48.61 in the month ending Dec. 21 to 46.22 in the month ending Jan. 20 to 42.39 in the month ending Feb. 19.
Ten out of 12 industries posted PMI readings below 50 for raw materials inventory last month. Industries categorized as “others” registered the lowest PMI (20) among all groups while rubber and plastic industries posted the highest PMI (53.6).
The PMI reading of employment sub-index once again stuck above the threshold level last month. However, it declined from 55.32 in the ninth month to 53.74 in the 10th month to 53.54 in the 11th month.
Clothing and leather industries registered the highest PMI (69.2) whereas industries categorized as “others” posted the lowest PMI (40).
Seven Secondary Criteria
Seven secondary criteria were also surveyed by the center to measure the manufacturing PMI.
The raw materials purchase price sub-index increased from 76.20 in the month ending Dec. 21 to 77.55 in the month ending Jan. 20 to 85.06 in the month ending Feb. 19.
All 12 groups posted PMI readings of higher than 50 for raw materials’ purchase price sub-index in the 11th fiscal month: The highest PMI was recorded for rubber and plastic industries with a reading of 96.4.
The warehouse inventory sub-index decreased from 49.78 in the month ending Dec. 21 to 49.67 in the month ending Jan. 20 to 45.14 in the month ending Feb. 19.
The lowest PMI sub-index of warehouse inventory level was recorded for industries classified as “others” with 20 and the highest was registered for non-metallic minerals industries with 68.4.
The exports sub-index slid from 47.19 in the month ending Dec. 21 to 44.93 in the month ending Jan. 20, but rebounded to 47.78 in the month ending Feb. 19.
PMI reading of exports sub-index was the lowest for oil and gas products industries and food industries with a reading of 42.6 and the highest PMI was posted for rubber and plastic industries (57.1).
The prices of manufactured products sub-index increased from 53.22 in the ninth month to 55.22 in the month ending Jan. 20 to 58.54 in the month leading to Feb. 19.
Metal industries recorded the highest PMI of 66.3 and food industries posted the lowest PMI reading of 47.9 during the 11th month of the Iranian year.
The fuel consumption sub-index fell from 62.70 in the month ending Dec. 21 to 61.49 in the month ending Jan. 20 to 59.49 in the month ending Feb. 19.
Textile industries and industries classified as “others” registered the highest PMI (70) while non-metallic minerals industries posted the lowest PMI reading for fuel consumption (47.4) last month.
The sales level sub-index dropped from 55.53 in the ninth month to 50.62 in the 10th month but improved to 57.80 in the 11th month.
Clothing and leather posted the highest PMI with a reading of 80.8 and industries categorized as “others” registered the lowest PMI with a reading of 20.
Production forecasts for the following month sub-index improved from 61.67 in the month ending Dec. 21 to 65.73 in the month ending Jan. 20 but declined to 53.38 in the month ending Feb. 19.
Among the 12 groups, non-metallic mineral industries registered the highest PMI reading of 73.7 in the 11th fiscal month while food industries recorded the lowest PMI reading of 38.3.
