Economy

NIBRI above pre-pandemic levels but growth signals are inconsistent, says Nomura

Our Bureau Mumbai | Updated on November 01, 2021

Railway freight revenues, manufacturing PMIs and GST E-way bills for October lower than previous months

The Nomura India Business Resumption Index picked up to 105.7 for the week ending October 31 from 104.8 in the previous week, 5.7pp above pre-pandemic levels (i.e. 100).

There was a whopping 13.3 percentage points (pp) rise in the Google workplace mobility index across the week, even as the retail and recreation index dropped by 0.4pp and the Apple driving index fell by 6.3pp. The labour participation rate fell to 39.9 per cent from 40.7 per cent, while power demand has fallen for three consecutive weeks (-1.5 per cent w-o-w (sa); -3.1 per cent the prior week).

Also read: At 100.6, NIBRI plateaus in Sept

But growth signals are currently inconsistent. Despite improving business resumption, railway freight revenues, and manufacturing PMIs, GST E-way bills as of end-October are lower than August/September levels. Credit growth, railway passenger revenues and traffic congestion have also been tepid. “Core infrastructure sector growth eased to 4.4 per cent y-o-y in September from 11.5 per cent in August, driven by coal, electricity and cement, indicative of late monsoons and the early impact of the energy crisis, setting the stage for lower industrial production growth in the next few months,” Nomura said.

“However, tailwinds include festive demand, backloaded fiscal activism and a further economic reopening. We maintain our 2021 and 2022 GDP growth forecasts of 7.7 per cent and 9.5 per cent, respectively, with downside risks for next year,” it added

Published on November 01, 2021

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