The annual change of the Leading Index (LI) continued its good performance by registering a growth of 5.3 per cent to record an index of 111.7 points in June 2022 after a rise of 2.3 per cent in the previous month (May 2022: 111.3 points).
The Department of Statistic Malaysia (DOSM) released its Malaysian Economic Indicators: Leading, Coincident & Lagging Indexes June 2022 report today, which stated the increase was mainly backed by the increment in Real Imports of Other Basic Precious & Other Non-ferrous Metals driven by the import of platinum-based metals and influenced by the low base effect from the previous year (June 2021: 106.1 points).
Leading economic indicators are used to forecast changes before the rest of the economy begins to move in a particular direction and help market observers and policymakers predict significant changes in the economy.
Concomitantly, the monthly change of LI increased 0.4 per cent in the reference month attributed mainly by Real Imports of Other Basic Precious & Other Non-ferrous Metals (0.6%) and Number of New Companies Registered (0.6%).
In June 2022, the LI which shows the ability to anticipate the future direction of the economy signals confidence towards further growth in the coming months through smoothed long-term trend index movements that intact above 100.0 points.
This is in line with the anticipated promising signs of strong domestic and export demand as well as the reopening of international borders amid slow global economic growth.
For the current economic scenario, the Coincident Index (CI) spiked 12.6 per cent year-on-year to record 121.5 points in June 2022 in tandem with the economic performance in the second quarter of this year where strong growth was recorded in June 2022. Furthermore, the CI registered 0.2 per cent month-on-month led by the increases in Industrial Production Index (0.9%), Capacity Utilisation in Manufacturing sector (0.7%) and Total Employment in Manufacturing sector (0.2%).
The Diffusion Index for LI recorded 42.9 per cent in June 2022. At the same time, the Diffusion Index for CI remained at 100.0 per cent since December 2021 representing that all the CI components increased over the past six months.
