ICC Releases Iran’s First Housing PMI

EghtesadOnline: Iran Chamber of Cooperatives has measured for the first time the purchasing managers’ index (PMI) for the housing sector in Iran, under the Farsi acronym “Shamekh”, for the month ending Oct. 22.

News ID: ۷۴۹۰۰۵

23 November 2019

According to Ali Moti-Jahani, ICC’s deputy for support, research and planning, the new report shows that the housing PMI for the month under review stood at 44.30.

PMI is an indicator of economic health for manufacturing and service sectors. The purpose of PMI is to provide information about current business conditions to business decision-makers, analysts and purchasing managers.

Raw material inventory levels, employment conditions, new orders’ conditions, supplier deliveries and export/production conditions were among criteria considered, yielding a final score of 1 to 100. If a business scores 50, it means that it has perceived no change compared to the previous month, while scores higher or lower than 50 indicate that the business is booming or slowing down respectively, Financial Tribune reported.

The housing PMI is based on five major survey areas: new orders, raw material inventory levels, production, supplier deliveries and employment. The surveys include 12 questions about business conditions and whether changes have been improving, deteriorating or remained the same.

Results published by Mehr News Agency quoting Moti-Jahani show that the PMI for performance sub-index, including production and supply that have the biggest impact on the index, stood at 44.30.

New orders sub-index stood at 46.20, supplier deliveries sub-index that measures delivery speed were at 52.53, raw materials inventory levels sub-index settled at 41.77 and employment sub-index stood at 50.63.

To calculate housing PMI, seven secondary criteria were also surveyed by ICC, including raw materials purchase prices that stood at 60.76, warehouse inventory level at 42.41, exports at 49.37, prices of products at 45.57, fuel consumption at 50.63, sales level at 47.47 and performance expectations for the following month settled at 61.39 in the month ending Oct. 22.

PMI, among the most exact indicators showcasing a country’s economic condition, was first devised by the Institute for Supply Management in the US in 1948. PMI is calculated as (P1 * 1) + (P2 * 0.5) + (P3 * 0) where P1 is percentage of answers reporting an improvement, P2 is percentage of answers reporting no change and P3 is percentage of answers reporting a deterioration.

The Central Bank of Iran's latest report on property sales in Tehran shows the number of home deals made in the capital city, which rose in the seventh month of the current Iranian year that ended on Oct. 22 after months of decline.

A total of 3,401 homes were sold in the capital during the seventh month of the current fiscal year, registering a 22% rise compared with the preceding month. They saw a year-on-year decline of 63.7% though compared with the 9,357 deals of the corresponding month of last year.

Data published by CBI on its website also indicate that the average price of each square meter of a residential unit in Tehran stood at 127.15 million rials ($1,059) during the month under review, showing a surge of 47.7% over last year’s same month, as average prices were registered at 86.1 million rials ($717.5) then.

Home prices in the capital city increased by 0.4% compared to 126.67 million rials ($1,055) in the sixth month of the current year.