It is 16 months now that the Statistics and Economic Analysis Center of the Iran Chamber of Commerce, Industries, Mines and Agriculture is publishing reports on the PMI of 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 (10%), Production (25%), Supplier Deliveries (15%) and Employment (20%), according to Financial Tribune.
The surveys include 12 questions about business conditions and any changes, whether it is improving, no changes or deteriorating.
The vehicle and auto parts manufacturing industry posted the highest PMI with a reading of 69.6 during the month under review while non-metallic mineral industries registered the lowest PMI reading with 39.3.
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 increased from 49.60 in the eighth Iranian month (Oct. 23-Nov. 21) to 59.56 in the ninth month (Nov. 22-Dec. 21) but declined to 51.27 in the 10th month (Dec. 22, 2019-Jan. 20).
Non-metallic mineral industries recorded the lowest PMI of the Production sub-index last month (27.8) while clothing and leather had the highest PMI with a reading of 78.1.
The New Orders sub-index increased from 48.97 in the eighth month to 55.89 in the ninth month but dropped to 50.49 in the 10th month with the top performing industry for the 10th fiscal month being vehicle and auto parts manufacturing (82.8).
The Supplier Deliveries sub-index increased from 59.38 in the eighth month to 62.33 in the ninth month but fell to 57.26 in the 10th month.
The highest Supplier Deliveries PMI was posted by vehicle and auto parts manufacturing with a reading of 63.8 and the lowest was recorded for machinery and home appliances with a reading of 48.5.
The Raw Materials Inventory sub-index increased from 43.58 in the month ending Nov. 21 to 48.61 in the month ending Dec. 21 but decreased to 46.22 in the month ending Jan. 20.
Eight out of 12 industries posted PMI readings below 50 for Raw Materials Inventory last month. Industries categorized under others registered the lowest PMI (37.5) among all groups while wood, paper and furniture industries posted the highest PMI (61.9).
The PMI reading of Employment sub-index once again stuck above the threshold level last month. It improved from 53.86 in the eighth month to 55.32 in the ninth month but dropped to 53.74 in the 10th month.
Clothing and leather industries registered the highest PMI (71.9) whereas non-metallic mineral industries posted the lowest PMI (41.7).
Seven Secondary Criteria
Seven secondary criteria were also surveyed by the center to measure the manufacturing PMI.
The Raw Materials Purchase Prices sub-index increased from 63.79 in the month ending Nov. 21 to 76.20 in the month ending Dec. 21 to 77.55 in the month ending Jan. 20.
All 12 groups posted PMI readings of higher than 50 for Raw Materials Purchase Price sub-index in the ninth fiscal month: The highest PMI was recorded for rubber and plastic industries with a reading of 93.3.
The Warehouse Inventory sub-index decreased from 51.94 in the month ending Nov. 21 to 49.78 in the month ending Dec. 21 to 49.67 in the month ending Jan. 20.
The lowest PMI sub-index was recorded for Textile industries (39.3) and the highest was registered for oil and gas product industries with 63.
The Exports sub-index increased from 46.27 in the month ending Nov. 21 to 47.19 in the month ending Dec. 21 but slid to 44.93 in the month ending Jan. 20.
PMI reading of Exports sub-index was the lowest for oil and gas product industries (33.3) and highest for wood, paper and furniture industries (52.4).
The Prices of Manufactured Products sub-index increased from 45.13 in the eighth month to 53.22 in the ninth month to 55.22 in the month ending Jan. 20. Metal industries recorded the highest PMI of 61.4 and food industries along with clothing and leather industries posted the lowest PMI reading of 46.9 during the 10th month of the Iranian year.
The Fuel Consumption sub-index grew from 58.91 in the month ending Nov. 21 to 62.70 in the month ending Dec. 21 but dropped to 61.49 in the month ending Jan. 20. Textile industries registered the highest PMI (78.6) while oil and gas products industries posted the lowest PMI reading for fuel consumption (50) last month.
The Sales sub-index improved from 45.93 in the eighth month to 55.53 in the ninth month, but declined to 50.62 in the 10th month.
Vehicle and auto parts manufacturing posted the highest PMI with a reading of 74.1 and food industries registered the lowest PMI with a reading of 35.4.
Production forecasts for the following month’s sub-index improved from 59.71 in the month ending Nov. 21 to 61.67 in the month ending Dec. 21 to 65.73 in the month ending Jan. 20.
Among the 12 groups, vehicle and auto parts manufacturing registered the highest PMI reading of 82.8 in the 10th fiscal month while machinery and home appliances recorded the lowest PMI reading of 54.5.