The average Producer Price Index for the services sector in the four-quarter period ending Dec. 21, 2022, which marks the end of the third quarter of the current Iranian year (autumn), increased by 52.6% compared with the corresponding period of the year before, according to the Statistical Center of Iran.
This marks the highest annualized producer inflation experienced by the services sector since winter 2013 (the earliest available data on PPI inflation on the SCI database).
The overall PPI for the sector stood at 619.3 in Q3 (Sept. 23-Dec. 21, 2022), indicating a 10.6% increase compared with the preceding quarter.
The index saw a 57% year-on-year rise.
PPI measures price movements from the seller's point of view. Conversely, the consumer price index measures cost changes from the viewpoint of the consumer. In other words, this index tracks changes in the cost of production.
The importance of PPI lies in its predictive content for the future pattern of Consumer Price Index. 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 “other services” with 1.8%.
For “water networks, wastewater management and wastewater treatment”, PPI stood at 297.6 in Q3, up 35.6% compared with the same quarter of the year before and up 8.3% compared with the previous quarter. The average annual PPI for the subsector in the four-quarter period ending Dec. 21, 2022, increased by 28.2%.
PPI for “repairing motor vehicles and motorcycles” stood at 1,104.7, indicating an 11.5% rise compared with the previous quarter and a 77.7% rise compared with the same quarter of the year before. The average PPI for the subsector in the four-quarter period ending Dec. 21, 2022, rose by 67.6%.
The index for “transportation and warehouse services” stood at 684.7, posting a 6.6% quarter-on-quarter rise and a 50% year-on-year rise. The average annual PPI inflation for the subsector stood at 50.7%.
For “services related to accommodation and food”, the index stood at 1,772.9, registering a 12.8% QOQ increase and a 109.6% YOY increase. The average annual PPI inflation for this subsector was reported at 102.3% — the highest among the groups under review.
For “information and communications”, it stood at 313.2, showing a 2.9% rise compared with the previous quarter and a 21.7% increase compared with the same quarter of the year before, with the average annual inflation at 24.6%.
“Insurance services” saw PPI stand at 315.9, registering a 2.4% QOQ rise and a 27.2% YOY increase. The average annual inflation was reported at 36%.
For “real-estate services”, the index stood at 312.9, posting a 12.2% rise compared with the previous quarter and a 34.3% increase compared with the same quarter of the year before. The average annual inflation for this subsector was at 29.1%.
“Professional, scientific and technical activities” registered a PPI of 409.3, indicating a 4.5% rise over the preceding quarter and a 30.9% increase over the same quarter of the year before. The average annual inflation stood at 31.4%.
PPI measured for the subsector of “administrative and support services” stood at 959.1, indicating a 4.1% rise compared with the previous quarter and a 37.3% increase over the same quarter of the year before. The average annual inflation for this subsector was reported at 45.3%.
“Education” recorded a PPI of 524.5, indicating a 34.7% rise over the preceding quarter and a 53.7% increase over the same quarter of the year before, with the annualized inflation at 42.2%.
For “social services”, PPI stood at 888.1, indicating a 9.6% rise compared with the previous quarter and a 72.7% increase compared with the same quarter of the year before. The average annual PPI for the subsector in the four-quarter period increased by 66%.
“Art, entertainment and leisure” recorded a PPI of 685.2 in Q3, indicating an 8.5% QOQ rise and a 66% YOY increase with the average annualized inflation at 60.7%.
And, “other services” registered a PPI of 804.9, indicating an 8.2% rise over the preceding quarter and a 56.7% increase over the same quarter of the year before. The average annual PPI for this subsector in the four-quarter period increased by 53.4%.
