The annual change of the leading indicator of the Department of Statistics Malaysia entered negative territory in July 2018, signalling a slowdown of the economy in the four to six months ahead.

The values for January and February 2019 were further down by 1.1% and 2.8%, respectively, suggesting that sluggish growth will persist at least until the middle of this year. The consumer confidence and business condition indices also support this scenario, as they continued on a downward trend that started back in Q3 2018 and reached 85.6 and 94.3 in March, respectively.

The manufacturing PMI had broadly similar dynamics – after the 51.5 peak in September last year it had been mostly declining to reach 47.2 in March. In April, however, it was up to 49.4, indicating some improvement in operating conditions, although it is still below the threshold of 50.

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