Monetary and Banking Research Institute
Date:3/6/2019 9:11:08 AM   |   Code : 294292   |   View: 485

Industrial Production of Iran Using the Information of Bourse Companies (Tehran Chamber of Commerce, Industries, Mines and Agriculture, 2015)


Employer: Tehran Chamber of Commerce, Industries, Mines and Agriculture (2015)

Executive Summary:

In a number of empirical studies, industry-specific time series are used to examine the state of recession and the prosperity of the entire economy and for the extraction of business cycles. Therefore, the study of industrial production is of great importance. In fact, the index of industrial production is an indicator of the economic activity of the whole economy.

The plan uses information from industrial Bourse companies to monitor the change in the industrial sector of the economy. Output reports are published seasonally and with a short delay after the end of the season, and include an analysis of changes in production, sales, and profitability and liquidity levels in various industrial branches and in comparison with previous periods. In addition to the fact that for the entire industry, based on the information of the Bourse companies, the activity index has been extracted, the production index for each industry is computed seasonally.

According to information provided by Bourse companies, this report provides forecasts of production status and production index in each industry and the growth rate of each company's sales. Information about the expected price index is also provided in each industry.

Due to the absence of information on all industrial workshops on an up-to-date basis, in order to provide an activity indicator for monitoring changes in production in the whole economy, the information of the industrial companies admitted to the stock exchange is used. The advantages of using this information is that they are up-to-date, regular and reliable. Therefore, using information from more than 230 industrial Bourse companies and using conventional methods to build an industrial production index, this index is developed seasonally for the first quarter of 2007 to the firth quarter of 2014. For indexing the process of industrial production in Iran, while collecting nominal products and the volume and value of the sales of industrial products, price information is collected from the companies' products, so that the true process of production is separated from the price trend and could be used for indexing the real industrial production.

Regarding the evaluations carried out on the quality of the calculated indices and the correlation of 90% between the calculated index and the value added of the industry and mining sector, it can be claimed that the industrial production index, which is constructed in this study, to the extent acceptable, shows the changes in the production of this sector.

Also, for better analysis of changes in production in the industrial sector, the classification of production in upstream and downstream industries, durable and non-durable, and the production of intermediate goods and capital goods, is used. One of the most important points in this classification is the behavior of these groups against sanctions and currency shocks occurred in 2011 and 2012. For example, the production of consumer goods and capital goods began to decline with the increase in the exchange rate at the end of 2011, which continued until 2013, but the production of intermediate goods started to slow down from the beginning of 2013. Therefore, such categorizations based on the nature of production can be used in order to further analyze the changes in production in this sector.

Changes in the production of various industries are also studied in this study using the information of the Bourse companies. Accordingly, the most important factor in the reduction of production in recent years has been the automotive and parts manufacturing industry. Of course, production in other industries such as basic metals and mineral industries has also declined significantly. The chemical industry, which experienced less reduction in 2012, also dropped significantly in 2013.

Also, in another section of this report, according to the information provided by Bourse companies and using time series models, the forecast of industrial production index and industry index are presented. To obtain the forecast of industrial production index of Bourse companies, the forecast information of these companies is used. For this purpose, the nominal production, the price and the amount of actual production are extracted. To derive the price effect of nominal production, such as the production indexation, for each industry, a basket of products is introduced and their prediction price is considered for each period, and then the expected price index is created for each industry.

Then, to determine how much the prediction of the industrial real output has changed, the effect of the expected price of the nominal production is eliminated, and the prediction index for real production is made. In fact, by doing this, the price effect of the product is separated from production effect, and it is possible to provide separate forecasts for the production and price for the various industries. The output of this project is a complete report of the detailed calculations and evaluations. The results of this project are seasonal reports in the quarterly periods, which allows to keep track of industry activities with up-to-date data.

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