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Iran's Industrial Production Shows Mixed Results In March-June

Iran Khodro car factory in Tehran. File photo
Iran Khodro car factory in Tehran. File photo

Production of many items listed on Iran's Industrial Production Index (IPI) has decreased in the first quarter of the Iranian calendar year (beginning March 21) the Islamic Republic Ministry of Industry, Mines, and Trade (MIMT)said in its latest report on Monday, August 19.

Manufacturing industrial products such as cars, TV sets, and Laundry machines have significantly decreased while mineral and petrochemical production somehow increased despite U.S. sanctions, MIMT said on its official site.

Washington imposed sanctions on Iran's mines and steel sector last May.

The U.S. Department of Treasury also sanctioned parts of Iran's petrochemical industry on June 7 for its support for the Islamic Revolution Guards Corps.

Nevertheless, MIMT's new report shows that mineral and petrochemical production had a modest increase in some sectors.

Iran’s petrochemical and metal-ore production in thousands of metric tons
% Change from same period previous yearMarch 21- June 20, 2019Products
6.5 %6109Steel
12.2%5476Steel products
-5.3%9099Iron Ore

Car manufacturing suffered a huge drop of more than 40%, declining to less than 185,000 sedans.

Bus, pickup and truck production also dropped more than 10%, 59%, and 70%, or 13,000, 411, and 1,147 vehicles respectively.

Production of many home appliances also dramatically dropped. With more than 47% decrease, only 93,300 TV sets, and with nearly 30% drop, 95,300 washing machines were manufactured in the first quarter of the year.

Nevertheless, the production of refrigerators and evaporative coolers increased by around 15% and 12.5% respectively.

Iran's Production of Domestic Appliances In Millions of Units
Iran's Production of Domestic Appliances In Millions of Units

A member of the board of directors of Iran's Home Appliances Association, Mohammad Reza Farivari, recently said that home appliance factories across the country were operating at only 25% to 30% of their capacity.

While the Islamic Republic's customs department and Iran's Organization of Trade Development have refrained from publishing any report on foreign trade in the past months, MIMT data show that the country's non-oil exports have dropped 1.2% during the first quarter of the Iranian calendar year, amounting to nearly $11.5 billion. Imports also show an 8.7% drop with a total of $10.23 billion.

It is hard to assess the accuracy or the reliability of data from one source in Iran, without a more comprehensive review of figures from multiple sources.

In the meantime, the overall Producer Price Index of the industrial sector stood at 545.4 in the first quarter of the current year (March 21-June 21), indicating a 13.7% increase compared with the previous quarter and an 88.7% jump over the same quarter of last year.

The industrial production index in the four-quarter period ending June 21 grew by 77.2% compared with the same period of last year, the Statistical Center of Iran recently reported. But this jump is due to the devaluation of the Iranian currency, which led to higher prices in rials and an increase in the IPI.