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Business activity resumption continued for the fifth consecutive week as the second wave of infections and restrictions continued getting subsided, a Japanese brokerage said on Monday.
The business activity now is only 13 percentage points lower than levels observed before the onset of pandemic in March 2020, Nomura said, citing the movement in a proprietary index of business activity resumption.
The index had fallen to a trough of nearly 40 percentage point (pp) below the pre-pandemic levels for the week ended May 23 this year because of the impact of the second wave of the pandemic.
However, as the new infection additions subsided and the mobility restrictions eased, the index has been climbing up steadily.
For the week ended June 27, mobility indicators like Google's workplace and retail and recreation mobility indices increased by 4.1 pp and 8.4 pp, respectively, from the previous week, while the Apple driving index rose by 14.7pp.
Power demand surged by a steep 7.8 per cent week on week, after a 2.2 per cent decline the previous week, while the labour participation rate inched down to 39.6 per cent from 40.5 per cent, it said.
The brokerage noted the acceleration in the vaccination during the week, but made it clear that the third wave of the pandemic is a key risk till the pace of inoculation becomes more widespread.
It welcomed the move by Maharashtra to partially re-impose restrictions by eliminating two top levels of easing, terming it as a positive pre-emptive step to balance lives and livelihoods.
Other ultra-high frequency indicators reflect a mixed performance for the goods sector in June, with the pace of increase in GST E-way bills matching April levels but daily railway freight revenues declining, while higher mobility suggests a pickup in services, especially transportation, the brokerage said.
It said May was the worst hit and a sequential recovery is likely in June.