Leading, Coincident, & Lagging Indexes (Aug 2020)

The Leading Index (LI) is a predictive tool used to anticipate upturns and downturns in the economy. The LI registered 108.5 points in August 2020 from 100.8 points in August 2019, maintaining an annual growth of 7.6 per cent. Based on month-on-month comparison, LI slipped to negative 0.5 per cent dragged by Number of New Companies Registered (-0.6%), Real Imports of Semi Conductors (-0.4%) and Number of Housing Units Approved (-0.1%).

Despite the softening in LI for the reference month, the growth rate of smoothed LI is consistently above spacing moving upwards. This implies that the Malaysian economy is expected to continue its recovery trend in the months ahead. However, the downside risk to growth remain amid the recent spike in COVID-19 cases.