Economic indicators: Nomura India Business Resumption Index plateaus in September

The Nomura India Business Resumption Index eased to 100.6 for the week ending September 19 from 101.4 the prior week, although still above its pre-pandemic level of 100.

While mobility continued to improve despite mixed indicators, other economic indicators such as e-way bills and rail freight remained uneven.

“We expect GDP growth to rebound to 5.0% q-o-q, sa, in Q3 (July-September; 7.3% y-o-y from 20.1% in Q2) and FY22 GDP growth to average 9.2% y-o-y,” analysts at Nomura Global Market Research said in a note Tuesday.

The NIBRI comprises Google mobility indices, driving mobility from Apple, power demand and the labour force participation rate. The index considers 23 Feb 2020 as the base for the comparisons.

The Google retail and recreation mobility index rose by 1.6 percentage points and the Apple driving index by 1.9 percentage points, but the Google workplace index fell by 1.9 percentage points.

Power demand remained weak, contracting by 2.6% week-on-week, while labour participation rate also fell to 39.8% from 40.9% in the previous week, analysts said.

They highlighted other high frequency data that have also been mixed.

The generation of e-way bills under goods and services tax as of mid-September was at 35.4 million, were lower than in mid-August of 47.3 million and mid-July of 63.8 million.

According to data from GST Network, over 40.3 million e-way bills were generated till September 19.

Meanwhile, average daily railway freight revenue inched up to 25.5 million in mid-September from 24.3 million in mid-August.

“The third wave of Covid-19 remains at bay so far, while the pace of vaccination has picked up to an average 8 million doses/day so far this month, up from 5.4 million in August (~15% of the population is fully vaccinated),” analysts noted.

However, they cautioned that supply-side bottlenecks may also weigh on near-term manufacturing growth, but services should pickup.

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