By Paul DiGiacomo, Head of Equity Research

The delta variant of the coronavirus has set back the normalization of social life, according to the asset manager Columbia Threadneedle Investments. This is reflected in the Columbia Threadneedle Return to Normal Index, which fell to 84% in early September, from 86% in early August. A value of 100% marks the normal level before the pandemic.

Columbia Threadneedle's global equity research team publishes the index each month as a leading economic indicator. It has four dimensions: back to school, back to travel and leisure, back to offices, and back to shopping in stores. These are American consumers, because private consumption in the United States, the world's largest economy, is of global importance. Experts use large amounts of publicly available data (Big Data) to analyse the time and money people spend in the four dimensions mentioned.

“The index is trading slightly below its peak, mainly due to the service component of in-store purchases,” wrote Paul DiGiacomo, head of equity research at Columbia Threadneedle. "If people continue to frequent the stores, the activity has decreased." This has slowed the index's steady rise since spring 2021. The barometer was 58% at the start of February, 66% in April and 76% in June (see graph). Before that, it had been moving more or less laterally since July 2020.

In view of the strong and sustained recovery of the summer, Columbia Threadneedle put forward as a base scenario of the index reaching its pre-crisis level by the end of July. This has become questionable in light of recent developments, he said. "If we were to see a sharp increase in hospitalizations or new negative data regarding vaccine efficacy, it could make it more difficult to return to normal levels," writes DiGiacomo.

Graph: Evolution of the return to normal index from February to September 2021