KUALA LUMPUR: Malaysia's Leading Index (LI) saw a year-on-year contraction of 0.2 per cent, narrowing to 109.2 points in October 2023 from 109.4 points in October 2022, according to the Department of Statistics Malaysia (DoSM).
LI is a tool used for predicting economic trends four to six months ahead.
The decline was due to the contraction in the real imports of semi conductor (-33.6 per cent), which demonstrated negative performance for 10 consecutive months, DoSM said in a statement.
Conversely, DoSM said there were increases in the number of housing units approved (40 per cent) and number of new companies registered (23.4 per cent).
Looking at the monthly performance, DoSM noted that the decline in LI narrowed to negative 0.2 per cent as against a negative 0.3 per cent in the previous month.
It said this better performance was fuelled by the real imports of other basic precious & other non-ferrous metals (0.5 per cent) and number of new companies registered (0.3 per cent).
Nevertheless, it added that the decline in real imports of semi conductors (-1.0 per cent) affected the overall growth.
"The smoothed growth rate of the LI for October 2023 remained below the 100.0 points trend anticipating a modest growth prospect, bolstered by the promising private consumption and encouraging labour market landscape," DoSM noted.
In view of the current economic situation, DoSM said the Coincident Index (CI) continued its positive growth since September 2021 by registering 124.1 points, rose by 2.9 per cent as compared to 120.6 points in the same month last year.
The CI is a composite indicator that reflects the current overall economic activity of a region or country.
According to DoSM, this performance was contributed by all components, mainly the real contributions, Employees Provident Fund (17.1 per cent).
Simultaneously, the CI monthly change registered an increase of 0.3 per cent, supported by all components except the Volume Index of Retail Trade (-0.3 per cent).
The Diffusion Index (DI) for LI increased to 57.1 per cent in the reference month as compared to 28.6 per cent in the previous month, while the Diffusion Index for CI remained unchanged at 83.3 per cent.
The DI is a statistical measure indicating the proportion of surveyed elements showing expansion or contraction within a specific economic indicator.