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EghtesdOnline: For the second year in a row, most Iranian industries experienced continuous growth for each quarter of the previous fiscal year (March 2017-18), the latest data on Industrial Production Index for large units released by the Central Bank of Iran indicate.

The last fiscal year saw IPI grow 5.5% year-on-year to 105.5.

Each quarter also posted healthy YOY growth. Q1 saw IPI rising 5%, then 6.5% in Q2, 4.42% in Q3 and 5.7% for the last three months of the year.

IPI is an economic indicator measuring real output in various industries, with industrial production and capacity levels expressed as an index level relative to a base year, which the CBI considers to be the fiscal 2011-12, standing at 100, according to Financial Tribune.

In other words, the index does not express absolute production volumes or values, but the percentage change in production relative to that year.

CBI calculates IPI using data on large industrial units with 100 workers or more operating in 24 industries.

The report indicates that 17 industrial groups posted YOY growth during the year. 'Beverage Production', with 18.3%, had by far the highest growth among all industries for the second year in a row.

It was followed by 'motor vehicles, trailer and semi-trailer manufacturing industries' with 12%, 'leather production' with 10.6%, 'production of goods not categorized elsewhere' with 10.1% and 'paper production' with 8%.

Seven industries were in the negative territory with 'maintenance and installation of machinery and equipment' posting the steepest drop with a 36.6% YOY downturn. The industry had touched bottom last year, too.

It was followed by 'apparel manufacture' with 10.3%, 'printing and publishing' with 7.4%, 'pharmaceutical industry, including chemical and plant-based drug production' with 5.7% and 'manufacture of other transportation vehicles' with a contraction of 1.2%.

The index movers last year did not change compared to the year before. 'Pharmaceutical industry, including chemical and plant-based drug production' had the most negative impact on the overall index, while 'motor vehicle, trailer and semi-trailer manufacturing industries' gave the biggest boost to the overall index.

> Big Hitters' Positive Performance 

Larger industries did not top the charts in IPI growth, yet their heavier weight meant even their minimal movements swayed the overall index.

Chemical producers constitute the largest industry on the list, responsible for more than one-fourth of the index movements.

They recorded 4.4% growth in the last fiscal. While sizable, the uptick slowed down compared to the two preceding fiscal years. Statistics by the Ministry of Industries, Mining and Trade indicate plastic products and base chemical products (excluding fertilizers and nitrogen products) to have the largest share of the industry's growth.

Next up is base metals, having an about 20% share in moving the index. Unlike chemicals, base metals had a better year in 2017-18 compared to the two years before as they grew 4.2% compared to a negative downtick and a limited 2% growth in 2015-16 and 2016-17. 

According to Iran Steel Producers Association, all steel products registered growth in output in the last fiscal year, save for rebar, prompting a healthy uptick for the industry.

Vehicle manufacture is the third largest industry, as its fluctuations determine about one-sixth of the IPI index. 

As noted earlier, it recorded the second-highest IPI growth with 12%, which is a far cry from the 38% uptick in the fiscal 2016-17. The downtrend is primarily attributed to the US withdrawal from the 2015 Iran nuclear deal, as the lifting of sanctions had brought most foreign carmakers back to Iran and supercharged production.

 

Central Bank of Iran Iran Industrial Production Index Iran Industrial Production