The PMI is locally known by its Farsi acronym Shamekh.
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.
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.
"Textile industries" posted the highest PMI with a reading of 67.5 during the month under review while "non-metallic mineral industries" registered the lowest PMI of 48.25.
Five Main Sub-Indices
The "production" sub-index for Iran’s industrial sector decreased from 61.96 in the current fiscal year’s sixth month (Aug. 23-Sept. 22) to 51.31 in the seventh month (Sept. 23-Oct. 22), but grew to 59.25 in the eighth month.
Industries classified as "petroleum and gas products industries" recorded the highest PMI of the "production" sector (67.5) while "non-metallic mineral industries" registered the lowest PMI with a reading of 45.
The "new orders" sub-index decreased from 58.93 in the month ending Sept. 22 to 45.22 in the month ending Oct. 22, but grew to 57.36 in the month ending Nov. 21, with the top performing industries being "textile industries" (75) and the worst being "non-metallic mineral industries" (40).
The "supplier deliveries" sub-index, which measures how fast deliveries are made, increased from 59.49 in the month ending Sept. 22 to 60.21 in the month ending Oct. 22 and grew to 60.63 in the month ending Nov. 21.
The highest supplier deliveries PMI was posted by "others" with a reading of 75 and the lowest was recorded for "rubber and plastic" with a reading of 50.
The "raw material inventory" sub-index decreased from 48.75 in the month ending Sept. 22 to 44.52 in the month ending Oct. 22, but grew to 47.75 in the month ending Nov. 21.
"Petroleum and gas products industries" and “non-metallic mineral industries" posted the highest PMI each with 60 while "rubber and plastic" registered the lowest PMI reading of 21.43 among all groups.
The PMI reading of "employment" sub-index grew above the threshold. It increased from 53.46 in the month ending Sept. 22 to 54.77 in the month ending Oct. 22 and grew to 56.1 in the month ending Nov. 21.
Industries classified as "textile industries" posted the highest PMI reading (68.75) whereas "rubber and plastic", “petroleum and gas products industries”, "non-metallic mineral industries" and “others” posted the lowest PMI each with 50.
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 decreased from 79.73 in the month ending Sept. 22 to 79.71 in the month ending Oct. 22, but increased to 85.12 in the month ending Nov. 21.
All 12 groups registered PMI readings of higher than 50 for "raw material purchase price" sub-index in the eighth fiscal month. The highest PMI was recorded for "clothing and leather" with a reading of 95 and the lowest for industries categorized as "others" with 75.
The "warehouse inventory" sub-index increased from 50.07 in the month ending Sept. 22 to 60.21 in the month ending Oct. 22, but declined to 48.35 in the month ending Nov. 21.
The lowest PMI reading for "warehouse inventory" sub-index was recorded for "textile industries" with 31.25 and the highest was registered for "others" with 75.
The "exports" sub-index decreased from 51.36 in the month ending Sept. 22 to 43.57 in the month ending Oct. 22, but increased to 54.7 in the month ending Nov. 21.
PMI reading of "exports" sub-index was the highest for "rubber and plastic" (64.29) and lowest for industries categorized as "chemical industries" (45.19).
The "prices of manufactured products" sub-index increased from 56.07 in the month ending Sept. 22 to 60.19 in the month ending Oct. 22 and grew to 62.63 in the month ending Nov. 21.
"Clothing and leather" recorded the highest PMI of 80 during the eighth month of the Iranian year while industries classified as "vehicle and auto parts manufacturing industries" posted the lowest PMI reading of 51.92.
The "fuel consumption" sub-index declined from 59.32 in the month ending Sept. 22 to 54.28 in the month ending Oct. 22, but increased to 66.08 in the month ending Nov. 21.
Industries categorized as "textile industries" registered the highest PMI measured for "fuel consumption" (81.25) while “rubber and plastic” registered the lowest (57.14).
The "sales" sub-index decreased from 58.19 in the sixth month of the current year to 46.53 in the seventh month, but grew to 57.67 in the eighth fiscal month.
"Textile industries" and “others” posted the highest sales PMI each with a reading of 75 and non-metallic industries registered the lowest PMI with a reading of 40.
The "production forecasts for the following month" sub-index decreased from 63.83 in the month ending Sept. 22 to 60.2 in the month ending Oct. 22, but grew to 62.57 in the month ending Nov. 21.
The sub-index "others" registered the highest PMI reading of 87.5 and "non-metallic industries" the lowest PMI reading of 40.
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.