A new report by the Statistics and Economic Analysis Center of the Iran Chamber of Commerce, Industries, Mines and Agriculture, the sponsor and coordinator of the survey says the “raw materials inventory” sub-index hit its 14-month high over the month under review.
The headline PMI is a number from 0 to 100, such that over 50 shows an expansion of the economy 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 directors, analysts and purchasing managers.
According to the report, the “business output” sub-index increased from 43.51 in the seventh month (Sept. 22-Oct. 21) to 46.68 in the eighth month (Oct. 22-Nov. 20) to 46.75 in the ninth month (Nov. 21-Dec. 20).
The “new orders” sub-index dropped from 46.16 in the seventh month to 43.27 in the eighth month but rebounded to 44.11 in the ninth month.
The “supplier deliveries” sub-index, which measures how fast deliveries are made, increased from 47.90 in the month ending Oct. 21 to 52.30 in the month ending Nov. 20 to 53.20 in the month ending Dec. 20.
The “raw materials inventory” sub-index climbed from 36.55 in the month ending Oct. 21 to 39.84 in the month ending Nov. 20 to 46.13 in the month ending Dec. 20.
The PMI reading of “employment” sub-index improved from 44.51 in the month ending Oct. 21 to 46.11 in the month ending Nov. 20 to 51.30 in the month ending Dec. 20.
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 decreased from 93.17 in the month leading to Oct. 21 to 83.09 in the month ending Nov. 20 to 76.64 in the month ending Dec. 20.
The “warehouse inventory” sub-index jumped from 46.42 in the month ending Oct. 21 to 50.63 in the month ending Nov. 20, but fell to 49.84 in the month ending Dec. 20.
The “exports” sub-index slid from 42.49 in the seventh month to 42.23 in the eighth month, but jumped to 46.14 in the ninth month.
The “prices of manufactured products or services” sub-index decreased from 77.31 in the month ending Oct. 21 to 64.71 in the month ending Nov. 20 to 56.73 in the month ending Dec. 20.
The “fuel consumption” sub-index increased from 53.74 in the month ending Oct. 21 to 57.07 in the month ending Nov. 20 to 60.44 in the month ending Dec. 20.
The “sales” sub-index fell from 41.85 in the month ending Oct. 21 to 41.22 in the month ending Nov. 20 but improved to 42.19 in the month ending Dec. 20.
The sub-index entitled “business output forecasts for the following month” climbed from 41.15 in the month ending Oct. 21 to 50.13 in the month ending Nov. 20 to 56.38 in the month ending Dec. 20.
The overall PMI grew from 44.47 in the month ending Oct. 21 to 45.70 in the month ending Nov. 20 to 47.77 in the month ending Dec. 20.
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.