India’s business resumption shoots up to record high: Nomura

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The business resumption activity has soared to a record high since the outbreak of Covid-19 over 15 months ago for the week ended August 8, according to a Japanese brokerage firm. The economic activity witnessed a record expansion, according to Nomura India Business Resumption Index (NIBRI). The index rose to a record high of 99.4 for the week ending 8 August, from 94.0 last week, near the pre-pandemic level of 100. It has also surpassed the pre-second wave peak of 99.3 in mid-February.

The latest data stated that after briefly plateauing, mobility has picked up sharply. The Google workplace, retail and recreation, and Apple driving index also showed a rise by 7.4 percentage points, 5.3 percentage points, and 6.7 percentage points, respectively. The index collects data from several trackers such as Google, Apple driving index and electricity demand. These are known as high-frequency data because they change frequently.

“This index is near the pre-pandemic level of 100, and surpassing the pre-second-wave peak (of 99.3 in mid-February),” said Sonal Varma, research analyst.

India’s electricity consumption plays a decisive role in the pace of its economic activity. The power demand also increased to 5.3% week on week after showing a decline for three consecutive weeks, according to the Nomura index.

The labour participation rate rose to 41.5% from 39.8% previously. This means more people are looking for jobs, which has pushed up the unemployment rate to 8.1%.

Another reason for the rise in the business resumption indexes because of the daily cases of coronavisrus infections reported remain flat at 40,000 per day.

With nearly 5 million doses of vaccination a day, the “vaccination pace is higher than the daily rate of 3.9 million in June” Nomura said. The data however vary widely throughout states, and states such as Karnataka and Tamil Nadu have increased restrictions, while Maharashtra has announced further relaxations.

“The latest rise in the NIBRI corrects its plateauing since mid-July and suggests the swifter-than-expected recovery from the second wave slump has continued in early August. Whether the surge in mobility, in turn, triggers a third wave is a key risk that we continue to monitor,” Varma said.