EghtesadOnline: Iran’s Retail Purchasing Managers Index stood at 35.71 in the month ending Nov. 20 to register a 6% improvement compared with the previous month’s reading of 33.69, according to the Economy and Planning Department of Iran Chamber of Guilds’ latest report.
The department has been measuring retail PMI, known by its Farsi acronym Shamekh, since the Iranian month ending May 20.
A reading of above 50 indicates expansion in the sector while below 50 indicates contraction. Traders watch these surveys closely as purchasing managers usually have early access to data about their company’s performance, which can be a leading indicator of its economic performance. A higher than expected reading should be taken as a positive sign for businesspeople while a lower than expected reading should be taken as negative.
The retail PMI is based on five major survey fields: "new orders", "raw material inventory", "production", "supplier deliveries" and "employment". The survey includes 12 questions about business conditions and any changes, whether it be improving, no changes or deteriorating.
It is measured through a monthly survey sent to managers of businesses engaged in the retail sector, including grocery shops, supermarkets, cosmetics stores, clothing outlets, bakeries and confectionery stores, home appliance and furniture sellers, kitchen and interior design groups, gold shops, perfumeries, traditional and fast food restaurants, automobile dealers, carpet and textile sellers, as well as businesses selling electronic products and mobile phones.
It is based on five major survey areas: "new orders" with a coefficient of 30%, "raw material inventory" (10%), "production" (25%), "supplier deliveries" (15%) and "employment" (20%).
The “activity level” sub-index, which has the highest impact on overall PMI and whose score equals that of the PMI index, stood at 35.71 in the month ending Nov. 20, posting a 6.01% growth compared with 33.69 of the previous Iranian month (ended Oct. 21).
The "new orders" sub-index stood at 28.57 in the month ending Nov. 20, indicating a 21.96% decrease compared with the previous month’s reading of 36.61.
The "supplier deliveries" sub-index, which measures how fast deliveries are made, increased from 38.73 in the month ending Oct. 21 to 55.1 in the month ending Nov. 20, indicating a 42.27% growth.
The "raw materials inventory" sub-index fell 12.96% from 50.41 in the month ending Oct. 21 to 48.88 in the month leading to Nov. 20.
The "employment" sub-index increased 46.33% from 20.92 in the seventh month to 30.61 in the eighth Iranian month.
To calculate retail PMI, seven secondary criteria were also surveyed by ICG, including "raw materials or essential products purchase prices", which stood at 91.27 in the month ending Oct. 21. The sub-index decreased by 8.32% to stand at 83.67 in the month ending Nov. 20.
"Warehouse inventory" slid by 2.62% to 53.06 in the eighth Iranian month from 54.49 in the seventh fiscal month.
The "exports" sub-index settled at 33.67 in the month ending Nov. 20 from 31 in the month ending Oct. 21, registering an 8.62% increase.
"Prices of products or services" dropped by 29.93% to stand at 57.14 in the month ending Nov. 20 from 81.55 in the month ending Oct. 21.
"Fuel consumption" declined by 8.07% from 56.61 in the seventh Iranian month to 52.04 in the eighth Iranian month.
"Sales" improved by 3.03% from 31.69 in the seventh month to 32.65 in the eighth month.
And, the "performance expectations for the following month" sub-index settled at 38.78 in the month ending Nov. 20 from 32.61 in the month ending Oct. 21, showing an 18.91% growth.