Economic activity is slowing down after phase of quick recovery, Nomura data shows

Economic activity softened in the week ended October 11 compared to a week earlier amid a downward revision of India’s recovery trajectory due to revised Google mobility data, according to a Nomura note on Tuesday.

The latest reading of Nomura India Business Resumption Index (NIBRI), which monitors high frequency indicators of normalisation, softened to 80.9 after a reading of 81.6 for the week ended October 4.

The index has recorded a downtrend after a post-lockdown high of 82.3 in mid-September. The tracker was at 82.9 in the week ended March 22 before a drastic fall to 44.7 in April.


While retail and recreational mobility continued to improve along with the Apple driving index, workplace mobility largely stagnated, the note said.

The labour participation rate posted a marginal decline to 40.6% last week when compared to 40.8% in the previous week. Similarly, the unemployment rate stood elevated at 7.7% after logging a sharp rise to 8% a week earlier from 5.8% before.

Power demand saw a further 1.9% contraction after a 3% drop in the previous week, it said.

On the other hand, Nomura found that real activity such as auto sales, railway freight, manufacturing and the external sector suggested an uptrend in activity in September preceded by a slower August.

“Real activity data on auto sales, railway freight, the external sector and manufacturing all suggest an uptrend in activity in September, after a slower August, in part driven by the further easing of lockdowns, a flattening pandemic curve, and the onset of festive season,” Nomura said.

However, the NIBRI seems to be plateauing since September-end, showing a similar trend to the July-August period when the sequential growth momentum ebbed after a phase of quick recovery, it said.

Nomura had projected a 10.8% contraction for the economy during the current fiscal with negative GDP growth in each quarter.