Despite registering a decline of 2.3%, the result was still better when compared with the same month in 2020, chief statistician Mohd Uzir Mahidin said in a statement.

“On a month-to-month comparison, the LI went up by 1.1% from the -0.6% in July, with most components registering positive growth primarily led by a hike in expected sales value in the manufacturing sector (1.3%).

“Taking into account the better performance of the LI and the transition of more states under the national recovery plan, it is anticipated that the country’s economy will pick up in the months to come.”

The LI is a predictive tool used to anticipate economic upturns and downturns in an average of four to six months ahead.

Uzir said the economic development prospects under the 12th Malaysia Plan would also navigate economic recovery through long-term global and national agendas over 2021 to 2025.

The decline in the LI is mainly influenced by the drop in the number of housing units approved, following the challenges faced in the real estate market and pessimistic sentiment among investors during the pandemic, he said.

Meanwhile, he said the coincident index (CI), which reflects current economic activity, showed a better downward trend with 1.6% in August as compared with -5.2% in the previous month.

“It recorded 108.2 points as against 110 points in the corresponding month in the preceding year. In terms of month-on-month, the CI edged up 4.2% in August.

“Capacity utilisation in the manufacturing sector (2.9%) and the volume index of retail trade were the main contributors to the increase,” he said.