Business activity reaches a high despite Omicron fears: Nomura

Despite fears of the Omicron variant of the coronavirus, business activity touched an all-time high since the onset of the pandemic for the week ended December 12, a Japanese brokerage said on Monday.

The Nomura India Business Resumption Index (NIBRI), which compares the activity for a particular week as against the one before the onset of the pandemic, rose to 115.8 from the 112.9 for the previous week.

“Despite Omicron risks, neither policy restrictions nor public fear factor appear to have had any impact on mobility so far, which is supporting a further normalisation in services,” it said in a statement.

Mobility indicators rose for the week, led by a 4 percentage point (pp) uptick in the Google mobility index, 2 pp increase in the retail and recreation index, while the Apple driving index climbed 2.9 pp.

The labour participation rate picked up to 41.4% from 40.5% — its highest in eight weeks — and power demand reversed last week’s fall with a 3.7% gain, it added.

‘Pace plateauing’

After supply-constraint induced declines in August and September, industrial output grew sequentially in October, although the pace of growth appears to be plateauing.

India remains at risk of virus setbacks since those fully vaccinated account for only 37.5% of the overall population, the brokerage said, adding that data thus far suggested that incremental growth momentum in Q4 may be driven more by services and re-opening and less by industry.