Leading indicators are economic factors that can predict future trends in the economy. They provide insights into where the economy might be headed, helping businesses and policymakers make informed decisions. Common examples include stock market performance, consumer confidence, and manufacturing activity. These indicators are valuable because they often change before the economy as a whole does. For instance, an increase in building permits may suggest future growth in the housing market. By monitoring leading indicators, analysts can anticipate shifts in economic conditions and adjust strategies accordingly.