Business activities at record high, NIBRI Index rose to 105

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In what is seen as an indicator of spurt in business activities, the Nomura India Business Resumption Index (NIBRI) rose to a record high of 105.0 for the week ended September 26 from 100.5 the prior week.

Last month, it had hit pre-pandemic level of 100.1. The recent high of 105.0 was much higher than 102.8, which was the peak registered last month, following which there was a plateau for the next three weeks at 100.8.

Other indicators

A steep increase was also registered in the Apple driving data. However, it is likely to have masked an otherwise modest rise in the overall business, the Mint reported quoting the Nomura study. Sonal Varma and Aurodeep Nandi, both economists at Nomura, said the rise was mainly owing to a steep 18 percentage points (pp) spurt in Apple driving index for the last week that showed higher traffic movement for the cities of Hyderabad and Pune. If the Apple driving index data were not to be included, Nomura estimates NIRBRI would have registered a growth of just 2 pp.

The reason for this is that other indicators for a spurt in business activity, except for freight and passenger revenues in railways, have seen modest growth. GST e-way bills in September have been underwhelming and the credit growth has not been quite encouraging either at 6.7% y-o-y. For the same period that Apple’s Driving Index showed a spike, Google workplace index rose by 3.4 pp and the retail and recreation index fell by 0.1 pp.

Supply-side bottlenecks still a worry

According to the report, part of which was published in the Mint, the demand for electricity showed a mild rise of 0.8% week-on-week after three consecutive weeks of contraction. The labour participation rate rose to 41.3% from 39.8% the previous week.

Mint quoted Varma and Nandi saying, “The upcoming festive season in Q4 2021 and the release of the arrears of ‘dearness allowance’ for public sector employees, should support consumption, although supply-side bottlenecks may weigh on near-term manufacturing growth.”