The announcement was made by the Statistics and Economic Analysis Center of Iran Chamber of Commerce, Industries, Mines and Agriculture. The center is measuring PMI, known by its Farsi acronym Shamekh, in Iran for the past 24 months.
PMI is an indicator of economic health for manufacturing and services sectors. It provides information about current business conditions to companies’ decision-makers, analysts and purchasing managers.
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.
The headline PMI is a number from 0 to 100. A PMI above 50 represents an expansion when compared with the previous month. A PMI reading under 50 represents a contraction, and a reading at 50 indicates no change. 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.
Vehicle and auto parts manufacturing industries posted the highest PMI with a reading of 60.4 in the last fiscal month while petroleum and gas products industries registered the lowest PMI reading with 44.
Five Main Sub-Indices
The "production" sub-index for Iran’s industrial sector decreased from 56.47 in the fourth month (June 21-July 21) to 46.23 in the fifth month (July 22-Aug. 21) but improved to 56.17 in the sixth month (Aug. 22-Sept. 21).
Industries classified as "others" recorded the highest PMI of the "production" sub-index last month (66.7) while petroleum and gas products industries registered the lowest PMI with a reading of 40.
The "new orders" sub-index fell from 58.85 in the month ending July 21 to 44.23 in the month ending Aug. 21 but improved to 57.48 in the month ending Sept. 21, with the top performing industries being chemicals (64.4) and worst being clothing and leather industries (42.3).
The "supplier deliveries" sub-index, which measures how fast deliveries are made, increased from 54.85 in the month ending July 21 to 55.49 in the month ending Aug. 21 to 56.72 in the month ending Sept. 21.
The highest "supplier deliveries" PMI was posted by wood, paper and furniture industries with a reading of 67.6 and the lowest was recorded for textile industries with a reading of 38.9.
The "raw material inventory" sub-index jumped from 39.53 in the month ending July 21 to 43.09 in the month ending Aug. 21, but slid to 41.01 in the month ending Sept. 21.
Non-metallic mineral industries and industries categorized as “others” posted the highest PMI (50) while textile industries registered the lowest PMI reading of 22.2 among all groups.
The PMI reading of "employment" sub-index was above the threshold last month. It dropped from 56.49 in the month ending July 21 to 52.98 in the month ending Aug. 21, but rebounded to 53.17 in the month ending Sept. 21.
Industries classified as “others” posted the highest PMI reading (66.7) whereas wood, paper and furniture posted the lowest PMI of employment sub-index (35.3).
Seven Secondary Criteria
To calculate PMI, seven secondary criteria were also surveyed by the center, namely "raw materials purchase prices", "warehouse inventory", "exports", "product price", "fuel consumption", "sales" and "production expectations".
The "raw materials purchase prices" sub-index decreased from 94.74 in the month ending July 21 to 88.63 in the month ending Aug. 21, but climbed to 93.08 in the month ending Sept. 21.
All 12 groups of industries under study registered PMI readings of higher than 50 for "raw material purchase price" sub-index in the sixth fiscal month. The highest PMI was recorded for textile industries, wood, paper and furniture industries and clothing and leather industries with a reading of 100 and the lowest for rubber and plastic industries with 80.
The "warehouse inventory" sub-index increased from 44.27 in the month ending July 21 to 51.28 in the month ending Aug. 21, but fell to 49.13 in the month leading to Sept. 21.
The highest PMI reading for "warehouse inventory" sub-index was registered for non-metallic minerals with 62.5 and the lowest PMI reading was recorded for rubber and plastic with 35.
The "exports" sub-index decreased from 49.45 in the month ending July 21 to 46.32 in the month ending Aug. 21 but rose to 47.44 in the month ending Sept. 21.
PMI reading of "exports" sub-index was the highest for rubber and plastic industries (55) and the lowest for textile industries (38.9).
The "prices of manufactured products" sub-index decreased from 76.16 in the month ending July 21 to 66.01 in the month ending Aug. 21, but grew to 70.80 in the month ending Sept. 21.
Textile industries recorded the highest PMI of 94.4 for the prices of manufactured products sub-index during the sixth month of the Iranian year while industries classified as “others” posted the lowest PMI reading of 41.7.
The "fuel consumption" sub-index sank from 61.83 in the month ending July 21 to 53 in the month ending Aug. 21 but climbed to 53.79 in the month ending Sept. 21.
Industries categorized as "others" registered the highest PMI measured for fuel consumption last month (66.7) while petroleum and gas products industries registered the lowest (40).
The "sales" sub-index decreased from 57.28 in the fourth fiscal month to 44.97 in the fifth fiscal month, but increased to 55.38 in the month ending Sept. 21.
Clothing and leather posted the highest sales PMI with a reading of 65.4 while industries classified as “others” registered the lowest PMI with a reading of 33.3.
The "production forecasts for the following month" sub-index improved from 51.37 in the month ending July 21 to 58.62 in the month ending Aug. 21 but slid to 52.28 in the month ending Sept. 21.
Six groups reported PMI reading above 50 for "production forecasts for the following month" sub-index with wood, paper and furniture industries registering the highest PMI reading of 64.7 while that of textile industries sank to 22.2.
The overall PMI for industries decreased from 55.25 in the month ending July 21 to 48.06 in the month leading to Aug. 21, but improved to 54.53 in the month leading to Sept. 21.