The Purchasing Managers' Index for the industrial sector of Iran dropped in the current Iranian year’s seventh month (Sept. 23-Oct. 22), latest data released by the Statistics and Economic Analysis Center of Iran Chamber of Commerce, Industries, Mines and Agriculture show.
It settled at 51.66 in the industrial sector in the seventh month from 53.25 in the preceding month (Aug. 23-Sept. 22), indicating a 2.9% fall.
PMI is an indicator of the economic health of manufacturing and services sectors. It provides information about current business conditions to companies’ decision-makers, analysts and purchasing managers.
The headline PMI is a number from 0 to 100. A PMI above 50 represents an expansion, under 50 indicates a contraction and a reading of 50 shows no change compared with the previous month. The further away from 50, the greater the level of change.
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 (10%), production (25%), supplier deliveries (15%) and employment (20%).
The survey poses 12 questions about business conditions and any changes, whether it is improving, no changes or deteriorating.
“Metallic industries" posted the highest PMI with a reading of 60.89 while “clothing and leather” registered the lowest of 40.36.
Five Main Sub-Indices
The "production" sub-index for Iran’s industrial sector increased from 48.45 in the fifth fiscal month (July 23-Aug. 22) to 53.25 in the sixth month of the current fiscal year (Aug. 23-Sept. 22), but decreased to 51.66 in the seventh month.
“Wood, paper and furniture" recorded the highest PMI of the production sector (70) while “clothing and leather” registered the lowest PMI with a reading of 35.71.
The "new orders" sub-index increased from 43.6 in the month ending Aug. 22 to 50.76 in the month ending Sept. 22, but declined to 45.08 in the month ending Oct. 22, with top performers being “rubber and plastic” (61.11) and the worst being "clothing and leather” (28.57).
The "supplier deliveries" sub-index, which measures how fast deliveries are made, decreased from 58.01 in the month ending Aug. 22 to 57.12 in the month ending Sept. 22, but increased to 61.19 in the month ending Oct. 22.
The highest supplier deliveries PMI was posted by "petroleum and gas products" with a reading of 67.65 and the lowest was recorded for "rubber and plastic” with a reading of 50.
The "raw material inventory" sub-index increased from 42.58 in the month ending Aug. 22 to 45.05 in the month ending Sept. 22 and grew to 49.64 in the month ending Oct. 22.
"Clothing and leather” posted the highest PMI with 57.14 while “non-metallic industries” registered the lowest PMI reading of 36.36 among all groups.
The PMI reading of "employment" sub-index increased from 53.77 in the month ending Aug. 22 to 55.07 in the month ending Sept. 22, but declined to 51.38 in the month ending Oct. 22.
"Metallic industries” posted the highest PMI reading (59.38) whereas "clothing and leather" posted the lowest PMI (42.86).
Seven Secondary Criteria
To calculate PMI, seven secondary criteria were also surveyed by the center, namely "raw material purchase prices", "warehouse inventory", "exports", "product price", "fuel consumption", "sales" and "production expectations".
The "raw material purchase prices" sub-index increased from 58.69 in the month ending Aug. 22 to 62.8 in the month ending Sept. 22 and 65.33 in the month ending Oct. 22.
The highest PMI was recorded for “rubber and plastic” with a reading of 77.78 and the lowest for "clothing and leather” with 50.
The "warehouse inventory" sub-index increased from 51 in the month ending Aug. 22 to 54.1 in the month ending Sept. 22 and grew to 55.18 in the month ending Oct. 22.
The lowest PMI reading for "warehouse inventory" sub-index was recorded for “petroleum and gas products" with 38.24 and the highest was registered for “textile industries” with 72.22.
The "exports" sub-index increased from 46.9 in the month ending Aug. 22 to 48.48 in the month ending Sept. 22 and 48.71 in the month ending Oct. 22.
PMI reading of "exports" sub-index was the highest for “petroleum and gas products” (55.88) and lowest for "clothing and leather " (35.71).
The "prices of manufactured products" sub-index increased from 44.96 in the month ending Aug. 22 to 46.95 in the month ending Sept. 22 and 47.82 in the month ending Oct. 22.
"Textile industries" recorded the highest PMI of 61.11 during the period while "wood, paper and furniture” posted the lowest PMI of 30.
The "fuel consumption" sub-index increased from 50.32 in the month ending Aug. 22 to 51.11 in the month ending Sept. 22 and grew to 51.84 in the month ending Oct. 22.
Industries categorized as "vehicles and related parts” registered the highest PMI measured for "fuel consumption" (61.11) while “non-metallic industries" registered the lowest (40.91).
The "sales" sub-index grew from 43.01 in the fifth month of the current year to 47.79 in the sixth fiscal month, but decreased to 43.93 in the seventh month of the fiscal 2022-23.
“Metallic industries” posted the highest sales PMI with a reading of 59.38 while “clothing and leather” registered the lowest PMI with a reading of 28.57.
The "production forecasts for the following month" sub-index decreased from 66.75 in the month ending Aug. 22 to 62.18 in the month ending Sept. 22 and to 60.39 in the month ending Oct. 22. Its sub-index "metallic industries” registered the highest PMI reading of 67.71 and "rubber and plastic" the lowest PMI reading of 44.44.
PMI, among the most precise indicators showcasing a country’s economic condition, was first devised by the Institute for Supply Management in the United States in 1948. It is calculated as (P1 * 1) + (P2 * 0.5) + (P3 * 0) where P1 is the percentage of answers reporting an improvement, P2 is percentage of answers reporting no change and P3 is percentage of answers reporting a deterioration.
