What Is Leading Indicators and Lagging Indicators

Leading indicators are metrics to measure performance or progress on activities that need to be done to achieve a goal. Lagging indicators are metrics that indicate whether the goal is achieved or not.

What is leading and lagging indicator?

If a leading indicator informs business leaders of how to produce desired results, a lagging indicator measures current production and performance. While a leading indicator is dynamic but difficult to measure, a lagging indicator is easy to measure but hard to change.

What is a lag indicator?

A lagging indicator is a financial sign that becomes apparent only after a large shift has taken place. Therefore, lagging indicators confirm long-term trends, but they do not predict them. … Looking at lagging indicators is one way to confirm whether a shift in the economy has actually occurred.