The services sector experienced the highest average annual inflation in the last fiscal year (March 2020-21).
The average Producer Price Index for the services sector in the year to March 20, 2021, which marks the end of last fiscal year, increased by 37.8% compared with the year before, the Statistical Center of Iran reported.
This is the highest annual inflation experienced by the services sector since winter 2013 (the earliest available data on services producers' inflation on SCI’s website).
The services PPI (using the year ending March 2017 as a base year) stood at 290.3 in the fourth quarter of last fiscal year (Dec. 21, 2020-March 20), indicating a 7.3% increase compared with the preceding quarter.
The index measured for Q4 producer inflation in the services sector indicates a 42.6% increase compared with the same quarter of the year before – the highest year-on-year inflation since spring 2012 (the earliest available data on services producers' inflation on SCI’s website).
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 regarding 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 work services” with 14.2%, “art, entertainment and leisure” with 1.1%, and “services categorized as other” with 1.8%.
For “water networks, wastewater management, and wastewater treatment”, PPI stood at 165.8 in Q4, indicating an increase of 0.2% and 1.7% compared with the previous quarter and the same quarter of the year before. The average annual PPI for the subsector in the four-quarter period ending March 20 increased 0.8%.
PPI for “repairing motor vehicles and motorcycles” stood at 444.9, indicating a 10.9% rise compared with the previous quarter and a 63.8% growth compared with the same quarter of the year before. The average PPI for the subsector in the four-quarter period ending March 20 increased by 55%.
The index for “transportation and warehouse services” stood at 333.4, posting a 7.9% rise quarter-on-quarter and a 54.3% rise year-on-year. The average annual PPI for the subsector in the four-quarter period increased by 50%.
For “services regarding accommodation and food”, PPI stood at 531.1, registering a 16.3% increase QOQ and 70.8% increase YOY. The average annual PPI for the subsector in the four-quarter period increased by 54.6%.
For “information and communications”, it stood at 218.2, indicating a 6.2% rise compared with the previous quarter and a 22.5% increase compared with the same quarter of the year before. The average annual PPI for the subsector in the period increased by 20.6%.
“Insurance services” saw PPI reach 166.5, registering a 0.9% rise QOQ and a 18.9% increase YOY. The average annual PPI for the subsector in the period increased 19.3%.
For “real-estate services”, the index was at 194.2, posting a 3.4% rise compared with the previous quarter and a 24.9% increase compared with the same quarter of the year before. The average annual PPI for the subsector in the four-quarter period increased by 22.8%.
“Professional, scientific and technical activities” had a PPI of 250.3, indicating a 4.5% rise over the preceding quarter and a 42.6% rise over the same quarter of the year before. The average annual PPI for the subsector in the period increased by 36.5%.
PPI measured for the subsector of “administrative and support services” stood at 500.4, showing a 16.5% growth compared with the previous quarter and a 69.1% increase over the same quarter of the year before. The average annual PPI for the subsector in the period increased by 57.3%.
“Education” recorded a PPI of 260.2, indicating a 2.3% rise over the preceding quarter and 29.8% increase over the same quarter of the year before. The average annual PPI for the subsector in the period increased by 29.5%.
For “social work services”, PPI stood at 348.7, indicating a 7.5% rise compared with the previous quarter and a 45.4% increase compared with the same quarter of the year before. The average annual PPI for the subsector increased 41.2%.
“Art, entertainment and leisure” had a PPI of 300, indicating an 8% rise over the preceding quarter and a 40% increase over the same quarter of the year before. The average annual PPI for the subsector in the period increased by 37.4%.
And, “services categorized as others” registered a PPI of 375.9, indicating a 10.4% rise over the preceding quarter and 49.9% increase over the same quarter of the year before. The average annual PPI for the subsector in the period increased by 44%.
2.3% Decline in Services Employment
The services sector employed 50.4% of the Iranian employed population (11.66 million) in the fourth quarter of last Iranian year (Dec. 21, 2020-March 20), 2.3% less than the corresponding period of the preceding year, whereas industrial and agricultural sectors provided 33.8% and 15.8% of jobs respectively.
Over 7.81 million were employed in the industrial sector, indicating an increase of 2.1% compared with the same period of the year before and 3.65 million worked in the agriculture sector, posting a 0.2% year-on-year increase, the Statistical Center of Iran reported.
The services sector consists of wholesale and retail trade; restaurants and hotels; transport, storage and communications; financing, insurance, real estate and business services; as well as community, social, education, health and personal services.
The sector employed 9.67 million men and 1.99 million women in Q4, such that over 6.88 million men and 927,211 women worked in the industrial sector and 3.09 million men and 562,828 women worked in the agriculture sector in Q4.
Services sector accounted for 59.2% or 10.23 million of all jobs in urban areas and 24.4% or 1.42 million of jobs in rural areas. The industrial sector made up 34.9% or 6.04 million of the jobs in urban areas and comprised 30.3% or 1.77 million of employment in rural areas. This is while 5.8% or one million of the total jobs in urban areas and 45.3% or 2.64 million of the jobs in rural areas were in the agriculture sector.
SCI put Q4 labor force participation rate — the proportion of the population of ages 15 and above that is economically active either employed or looking for a job — at 40.9% or 25.61 million people, registering a 1.5% decrease year-on-year.
Men’s and women’s economic participation rates were 68.5% and 13.3% respectively in the same period.
SCI reports that 21.44 million men and 4.16 million women of ages 15 and above were economically active in Q4, i.e., they were either employed or looking for a job.
