What are the leaders?

indicators are a way to measure performance. They are important in different aspects of our lives. They provide feedback on what is happening, how we can improve, and warn us of the imminent changes we will have to prepare for. The main indicator is simply a warning feature of future events.

We all use front indicators in our everyday life. A good example is the dashboard in the car. It has different meters that will alert you to the problem before this happens to act and avoid car problems, gas, etc. Another example of the front indicator is the traffic light. Light turns into a yellow - warning signal - before red, tells you to stop.

The primary role of leading indicators is to help change and improve future results. In the economic arena, where the term is most commonly used, leading indicators change before the economic change. These are timely warning signals that tell us to proceed with caution.

In 1995, the Bureau of the Ministry of Commerce created a private, non -governmental organization, a conference council to determine the monthly front index. The index called the front indicator index is calculated on the basis of ten different variables. The main indicators used to calculate the index include things, such as the S&P 500 Index, the value of the cash supply adjusted for inflation and the average number of new unemployment insurance applications submitted in the previous month.

There are many factors in the manufacturing industry that are taken into account when calculating the front indicator index. The number of new orders for production goods and materials, as well as the speed with which suppliers supply new goods. The equation also belonged to the average weekly hours working employees. The last, but the CV, is not least considered to be considered by the sentiment of the consumer and the number of new residential buildings.

historically, these ten variables before the recession turned down. However, no system used to predict the future is perfect. One of the problems with the leading indicators index is that the delay between the signal of the possible recession and the actual recession varies. The index also occasionally dropped without being followed by recession.

Regardless of their accuracy, the leaders are useful because they give early warnings of imminent problems. It is a hint that we have to take a closer look at, to explore what is happening, evaluate the accuracy of information and make any necessary adjustments for the future.