Weekly economic indicators show slight improvement as restrictions eased

Data shows most indicators are still significantly lower than peak levels

Economic activity may have stepped up with easing in restrictions in early May.

At least two major weekly economic indicators that Business Standard tracked showed signs of improvement over the previous week, namely traffic and power generation; though still far from normal levels.

These two indicators along with pollution levels were tracked till the end of the working week on May 8. Other data tracked by Business Standard include internet speeds, Google location data and railway freight numbers. Some of this appears with a lag. For example, the  internet speed data is as of May 3rd. The Google location data is as of May 2nd.

When Covid-19 hit China, the economic situation was difficult to track with monthly or quarterly data. Much of this appeared with too much of a lag to capture the fast-changing situation on the ground. Analysts, therefore, used data which appears with greater frequency to get a sense of expected trends. This has also helped track changes in India.

For example, traffic data showed some signs of life on a relative basis compared to the previous. week. Traffic was down 75 per cent earlier, now it is down around 70 per cent for the week ending May 8 for Mumbai and Delhi (see chart 1 for daily changes).

There is lower need for power generation since industrial activity has taken a hit. Data for electricity generation showed a 20 per cent decline accordingly. The gap, however is lower than last week. Some companies are said to have started operations (see chart 2).

Pollution numbers were slightly higher for Delhi than they were in the previous week. Some of this could be seasonal as a similar increase is seen in the previous year, though from a higher base.  Pollution has been mapped by tracking levels of nitrogen dioxide. The emission comes from industrial activity as well as vehicles.

Business Standard looked at Central Pollution Control Board data for Mumbai and Delhi. Mumbai had comparable daily data for Bandra, while in Delhi the average across 37 locations was taken for the analysis. There is a significant decline since the lockdown came into effect in March. Though there is a rise in absolute pollution numbers for Delhi, the last week shows no change in Mumbai. Even in Delhi the gap over the same period last year remains (See chart 3.  

Internet speeds are still far from their peak in March. Internet speeds decline during lockdowns. This has been observed in multiple countries. More people work from home. They consume more data as they become dependent on the internet for entertainment too. This has the effect of increasing the load on internet infrastructure including fixed and mobile internet, making it slower than before. The internet speed data from international tracker Ookla is for the week ending 3rd May (see chart 4).

The Google data is as of May 2. It shows that visits to retail and recreation spots are still down 85 per cent compared to a baseline period of normal operations. Grocery and pharmaceutical visit, more essential by nature, are also down 44 per cent.  The data is released with a lag and is based on location information put together by the company (see chart 5).

The Indian Railways has also reported a decline in the goods that it carries. Major segments like coal and minerals show a decline in line with the fall in economic activity. Transport of foodgrains, flours and pulses is the only segment which shows a significant rise (see chart 6).