Nomura Business Resumption Index- Update

February 22, 2022

For the week which ended on 2oth February, the Nomura India Business Resumption Index (NIBRI) reached a record high of 122.8, up from 119.5 the previous week.

Overview:

The Index showed weak demand due to rising inflation and the scarring due to the pandemic, as the recovery remains uneven, with sluggish consumption and services even before the third COVID-19 wave.

Findings of the index

NIBRI, at present, has risen around 23 percentage points (pp) higher than pre-pandemic levels, and around 21pp higher than the third wave.

The Index reported that Google workplace rose by 1.4 pp and retail & recreation mobility rose by 6 pp from the previous week, touching record highs. The Apple driving index increased by 11.3 points, the labor participation rate remained unchanged at 40.1 percent, and power demand increased by 0.4 percent following a 1.5 percent drop.

The monthly data until the month of January suggests that the third wave had very little on demand, while the supply side remained intact.

While the third wave appears to have subsided, concerns about growth remain according to Nomura’s weekly analysis. This indicates weak rural demand due to the pandemic and greater inflation, while the industrial areas are suffering from restrictions on the supply-side of the market.

Still, GDP growth of 8.7% in FY22 and 7.8% in FY23, with stronger public CAPEX (Capital Expenditure) along with services normalization, and easy financial conditions have been forecasted.

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