The NIBRI fell to 95.3 for the week ending July 25 from the recent high of 96.4 (the previous week), still at levels prior to the second wave but 4.7pp (percentage points) below pre-pandemic levels.
“Slight weekly wobble, but the Nomura India Business Resumption Index is at levels prior to the second wave,” Nomura said, citing mobility indices registering the first week-on-week fall since mid-May, with Google’s workplace and retail & recreation mobility down 0.4pp and 0.6pp, respectively, and the Apple driving index down 2.3pp.
As per the report, power demand also fell by a steep 4.1% w-o-w (sa) after a 2.8% decline the previous week. The labour participation rate, however, rose to 41.1% from 40.4%.
While early data for June suggest a return to conditions similar to April, after the shallow decline in May, supporting our view that the sequential drop in Q2 (April-June) GDP growth will be much less than consensus expects, Nomura said mobility, railway freight revenues and GST e-way bill data suggest some stagnancy in July, even as the trade sector remains strong.
The daily average e-way bills as of July 18 was at 1.97 million, up 8.5% from the full-monthly average for June. India’s goods exports rose 45.13% year-on-year to $22.48 billion in the first three weeks of July.
“The pace of vaccinations stagnated, with the month-to-date average in July at ~3.7mn doses/day,” the firm said, adding that it currently forecasts a faster pace of vaccination starting in August, but the recent pace suggests risks are skewed towards a delay.
“With pandemic cases plateauing at an elevated level of ~39,000 new cases per day?, susceptibility to a third wave remains a key growth risk,” Nomura said.
India reported 39,361 new cases of Covid-19 in the last 24 hours.
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