Weekly economic indicators show more signs of life as economy trudges back

Weekly economic indicators are showing increased activity as the lockdown slowly eases.

Key indicators suggest more power generation, higher freight being carried by the railways, lower load on the internet and more.

Business Standard tracks weekly economic indicators as a means of better understanding how the economy is doing in the lockdown. Many indicators such as gross domestic product and other data which appear monthly or quarterly come with a lag. Analysts have therefore turned to other measures which appear more frequently. They have done so in other countries such as China which has also gone through a lockdown. Indicators like the Google Mobility reports which show where people are going, and internet speeds appear after a gap of a few days. Most other data such as traffic are for the period ending Friday, May 22nd.  

Traffic data shows more vehicles are now plying the roads at least in the capital. New Delhi traffic had been 60.8 per cent below normal for the week ending May 15th. The gap is now 52 per cent. Mumbai has not seen a similar pick-up with levels similar to the previous week (see chart 1).

 

Pollution levels for the last week also indicate increased activity levels. Business Standard tracked the levels of nitrogen dioxide in two major cities, Mumbai and Delhi. Nitrogen dioxide is a pollutant which is the result of industrial activity and is also emitted from vehicles. Emissions had dropped to almost negligible levels during much of the lockdown. The gap has since narrowed compared to emissions last year. The gap in Delhi has narrowed from 70 per cent to being now almost non-existent, with levels of nitrogen dioxide now similar to the same period last year. In Mumbai the daily gap has narrowed from ‘none’ detected to a fall of less than 30 per cent for the period ending Friday (see chart 2, 3).

 

Power generation has also seen a narrowing of the gap with last year. The seven-day moving average gap for the week ending Friday showed a 12.5 per cent decline over the same period in 2019. It has reached around 28 per cent in the days immediately after the first lockdown was announced (see chart 4).

 

Google provides slightly lagged data on visits to places by category. The current data under consideration is as of May 16th. It includes the number of times people visited grocery stores, retail and recreation spots as well as workplaces and residences. All the places show a gradual increase in visits. Residences are beginning to see a decline, marking a slow inversion of the post-lockdown trends (see chart 5).

 

Internet speeds too are market a gradual rise. Internet speeds tend to decline during  lockdown. This is because more people are working from home. There is a rise in video-conferencing. People consume more entertainment through Netflix and similar platforms when they are stuck at home.  Global internet tracker Ookla data showed that median mobile download speeds have improved and now show only a single-digit decline from an average over a comparable period before the lockdown. Average speeds in January and February were considered for this comparison (see chart 6).   

 

Freight data which is for the seven days ending Saturday, also suggests more goods may be on the move. The quantity of goods transported is down by around 20 per cent, which is better than April figures of over 35 per cent. Indian Railways’ freight earnings have not improved as much. It is still down 31.8 per cent for the last seven days for which data is available, compared to 35.9 per cent in April (see chart 7).