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‘Biz resumption index turns positive after 11 weeks’

MUMBAI: After declining for 11 consecutive weeks, an economic activity index plotted by a Japanese brokerage showed its first pick up for the week ended May 30, leading it to speculate if businesses are past the trough.
The Nomura Business resumption Index (NIBRI), which was started since the early days of the pandemic last year, picked up to 63.6 as on May 30, from 60.3 in the previous reporting week, the brokerage said.
It said the index “appears to be bottoming out” and if the rise becomes a trend, it will support the view that the highest impact of the pandemic will be limited to May.
Since April, various parts of the country had to impose fresh lockdowns because of a surge in new COVID-19 infections in the second wave of the pandemic. Even though a national lockdown has been avoided, this has led to a rash of downward revisions in growth estimates by analysts.
A decline in new infections over the last few days has led many to speculate if the worst impact of the second wave is behind the country.
“As states slowly embark on a calibrated easing of restrictions, mobility should improve, and real activity data should gradually follow,” Nomura said.
Flagging resurgence of cases in the event of opening up of the lockdowns by states as a key risk, it said vaccination is set to gather pace, and hence economic hit from the second wave will be significantly less than that of the first wave or what was feared earlier when the second wave began.
During the reporting week ended May 30, mobility indicators seem to have driven the uptick, it said.
Google’s workplace and retail and recreation mobility indices picked up by 5.1 percentage points (PP) and 3.1 percentage points from the previous week. Apple driving index rose by 6.1 PP, after a 4.6 PP rise the previous week.
Power demand also rose by 5 per cent as compared to the previous reporting week, reversing the average weekly 4 per cent contraction for the past six weeks.
The labour participation rate, on the other hand, moderated to 39 per cent from 39.4 per cent, although the unemployment rate improved to a still-elevated 12.2 per cent from 14.7 per cent last week, the brokerage said.

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