Business resumption recovers from Omicron woes, finds Nomura study

Representative image.

Business resumption seems to have gathered momentum, leaving behind the Omicron crisis, as states relax stricter norms to avert wider spread of the contagion.

The Nomura India Business Resumption Index recovered nearly 11.5pp to 113.20 for the week ended February 6 as against 104.80 a week back, the Japanese financial holding company said on Monday.

The index saw nearly 18pp fall in January following the third COVID wave that hit the country.

"Mobility has recently turned a corner. Google workplace and retail and recreation mobility rose by 9pp and 6.7pp, respectively, from the prior week, while the Apple driving index rose by 13.3pp. The labour participation rate rose to 40.5 percent from 39.3 percent, while power demand rose by 13.3 percent week-on-week from 0.3 percent," a Nomura report said.

The improvement indicates an ebbing third wave and lower public risk perception, with new daily cases down to below 100,000 from over 300,000 at end-January, although the death rate has doubled over the fortnight. State governments have announced a gradual relaxation of restrictions.

The Union government has announced booster doses for frontline workers and senior citizens along with vaccination for children aged 15-18 years from January.

The report suggests that the other ultra-high frequency data too seem to have inflected. Daily railway passenger revenues are almost back to pre-third wave levels, while freight revenues continue to climb. January GST e-way bills have also been healthy, and the drop in domestic flight departures has bottomed.

"This is in line with our view that the third wave impact will be limited to January. We expect FY22 GDP growth of 8.7 percent YoY," the report said.