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New Straits Times
26-05-2025
- Business
- New Straits Times
Malaysia's leading index rises 0.6pct in March, signalling continued growth
KUALA LUMPUR: Malaysia's economy is expected to maintain its growth trajectory, albeit at a more moderate pace, supported by solid economic fundamentals, said MIDF Amanah Investment Bank Bhd. The leading index (LI), a key predictor of the country's economic trajectory, rose by 0.6 per cent year-on-year (y-o-y) to 112.5 points in March 2025, up from 111.9 a year earlier (as compared to February 2025: +0.1 per cent y-o-y). In a note today, the investment bank said that while a favourable trade outcome with the United States could help alleviate some trade-related challenges, the external environment remains uncertain. "Given this, domestic economic growth is expected to remain the key driver of Malaysia's economy, moving forward. "The smoothed long-term trend shows that the LI in March 2025 remains below 100.0 points," it said. MIDF said that this improvement was mainly driven by the double-digit expansions in the number of housing units approved (+27.8 per cent y-o-y) and the real imports of semiconductors (+22.3 per cent y-o-y). However, it said that on a monthly basis, the LI was unchanged during the month (-0.04 per cent month-on-month (m-o-m); February 2025: -0.02 per cent m-o-m), marking the second consecutive month of relatively flat performance. "The ongoing subdued and stagnant performance was attributable to the decline in the Bursa Malaysia Industrial Index (-0.2 per cent m-o-m; February 2025: -0.1 per cent m-o-m) and real imports of semiconductors (-0.2 per cent m-o-m; January 2025: +0.3 per cent m-o-m)," it said. Nonetheless, the investment bank said the coincident index (CI), which reflects current economic performance, posted slower growth of +1.4 per cent y-o-y (February 2025: +1.9 per cent y-o-y), reaching 126.8 points (March 2024: 125.1 points). "The sustained growth was underpinned by broad-based gains across all components of the CI, except for the real contributions to the Employees Provident Fund. "On a monthly basis, the CI fell by -0.2 per cent m-o-m during the month (February 2025: +1.8 per cent m-o-m), returning to negative territory as seen in January 2025. "The decline is mainly due to contraction in capacity utilisation in manufacturing (-0.3 per cent m-o-m; February 2025: +2.3 per cent m-o-m). "Both total employment and real salaries and wages in the manufacturing sector recorded a marginal decline of -0.1 per cent m-o-m, following a flat reading in the previous month," it added.
BusinessToday
23-05-2025
- Business
- BusinessToday
Malaysia's LI Rose 0.6% In March, Signaling Continued Growth
Malaysia's Leading Index (LI), a key predictor of the country's economic trajectory, rose by 0.6% year-on-year to 112.5 points in March 2025, up from 111.9 a year earlier, according to the Department of Statistics Malaysia (DOSM). The improvement was driven mainly by strong performances in two indicators: the Number of Housing Units Approved, which surged 27.8%, and Real Imports of Semiconductors, which climbed 22.3%. These gains reflect sustained activity in the construction and electronics sectors — both critical to Malaysia's domestic and export-oriented economy. However, on a month-on-month basis, the LI posted a marginal decline of 0.04%, influenced by a 0.2% drop in both the Bursa Malaysia Industrial Index and Real Imports of Semiconductors. This suggests near-term volatility in industrial and external trade indicators. Despite this minor dip, DOSM noted that Malaysia's economy is expected to continue expanding, albeit at a moderate pace, underpinned by sound economic fundamentals and proactive fiscal management. The smoothed long-term trend of the LI remained below the 100.0-point threshold, indicating that while growth is present, it may be slower in the near term. The Coincident Index (CI), which reflects current economic conditions, also posted a 1.4% year-on-year increase, reaching 126.8 points in March 2025, up from 125.1 a year earlier. This growth was broad-based, driven by gains in almost all CI components, with the exception of Real Contributions to the EPF, which showed a decline. On a monthly basis, however, the CI eased by 0.2%, attributed primarily to a 0.3% decline in Capacity Utilisation in Manufacturing, signaling a slight pullback in factory activity during the month. In a positive sign, the Diffusion Index, which measures the breadth of growth across indicators, remained above the 50-point benchmark — suggesting continued expansion momentum. The LI Diffusion Index climbed sharply to 71.4% in March from 28.6% in the prior month, while the CI Diffusion Index held steady at 66.7%. Overall, while short-term indicators show some volatility, Malaysia's economic outlook remains broadly positive, supported by steady domestic activity and a stable policy environment. Related
